A proposed approach to increase the effectiveness of internal control in reducing tax evasion in companies

Abstract EN

This paper aims at shedding the light on the role of the internal control in reducing tax evasion and fraud at some companies and the contribution of taxes to state resources.

taxes are a funding and multipurpose tool used to maximize resources and provide services by the government.

this study introduces this problem and the role of internal control in its remedy.

after introducing the concepts of tax and tax evasion, the researcher introduces some solutions to reduce tax evasion.

the researcher indicates that tax evasion is a global phenomenon and rife in countries where control systems are still incomplete.

the problem of tax evasion and means of tax evasion and its combat, internal control, as well as the use of preventive means to prevent tax evasion are not enough since this phenomenon has worsened and the means of tax evasion has diversified.

the researcher reached to the conclusion that lack or ineffective internal control can make the internal control system face some problems that makes it unproductive, and this will be reflected on the state treasury.

the researcher made some recommendations including the necessity to reactivate the role of internal control in companies by developing a code of honor and adhering to rules adopted by this code, as well as creating an effective system of governance that adopt these rules.

finally, there should be legislation in place to criminalize tax evasion by imposing strict punishment on tax evaders and manipulators of a company who manipulates or covers up companies’ profits.