The better the question
How do you plan a journey to save a company money?
Weighing the project considerations
Before deciding on the best way forward, we proposed that the bank consider a range of issues. These included reviewing past claims to identify any areas of underclaimed input VAT/GST, the current processes and technology used and what technological enhancements it was considering rolling out within five years.
We asked the bank to consider a range of issues. Could improvements to the current VAT/GST reclaims process be “baked into” these enhancements? Could the deductile/nondeductible determinations used for corporate income tax and employment tax be applied to VAT/GST? Could they get better visibility from their VAT/GST reporting?
We also encouraged it to look at whether any improvements identified for Europe could be expanded to other regions, whether to keep functionality in-house or outsource, and if outsourcing was selected, to consider whether the process could be easily brought back in-house in the future.
Finally, our team recommended analyzing what the bank’s peers were doing.
The better the answer
Identifying missed VAT/GST refunds
Reviewing past claims to increase recovery rates
We proposed reviewing the bank’s T&E and accounts payable (AP) processes, its sources of information and its controls for claiming input VAT/GST refunds, as well as the enterprise resource planning (ERP) systems, technology and automation it was already using.
Using data analytics, we proposed identifying input tax errors and underclaimed VAT/GST for past periods. We also compared the company’s performance against leading practices to highlight opportunities for improvement. We then helped management explore a range of in-house and outsourced approaches that would meet the bank’s budget and strategic objectives.
As a result of our review, the bank identified “missed” and “trapped” VAT/GST for past periods and submitted refund claims where appropriate.
By leveraging plans for future investments in technology and automation, we helped the company’s tax and finance departments work with the business units to implement cost-effective process improvements. The benefits included reduced processing times and increased claims accuracy — leading to opportunities for higher VAT/GST recovery rates in the future while reducing the risk of tax authority audits.
The better the world works
Recovering more tax going forward
Our improvements allow the client to look further afield.
After our initial review, we helped the bank adopt in-house VAT/GST data analytics software, allowing it to regularly test its refund processes using its ERP systems. We also introduced enhancements that allowed for continuous improvement and accurate review for every reporting cycle.
For example, we developed a bespoke key word repository for expense claims that allows the system’s “robots” to identify allowable, disallowable and doubtful items, while adapting to changes in the regulatory environment and learning from experience.
With the new approach that we introduced, the bank was able to not only increase its claims for foreign and domestic VAT/GST but also identify opportunities to recover other taxes.
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