A tax audit is a scrutiny of financial information to ensure compliance with tax laws, promoting fairness, and deterring fraudulent activities.
Tax audits play a crucial role in revenue collection, ensuring taxpayers pay their fair share for government-funded services and infrastructure.
Compliance with tax laws is encouraged through audits, reducing the likelihood of tax evasion and promoting accurate reporting of income and expenses.
The threat of an audit serves as a deterrent against tax fraud, contributing to data quality and preventing abuse of tax schemes.
Tax audits not only identify errors but also contribute to revenue recovery, validating financial data and supporting economic policy formulation.