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Abstract. Under the Value Added Tax (VAT) system, the validity of the collection is indicated by the issue oftax-invoice. Without tax-invoice, the taxable firm can be assumed not doing their obligation to collect VAT,whereas the buyer may be regarded as not paying VAT. The invoice is very important for the VAT mechanism.Zero-rate on export facilitates the exporters to claim refund on some input taxes. However, the ease and simplicityof VAT refund has been abused by taxable firms and non taxable firms with the aid of tax officers. This studyis aimed to analyze the causal factors of the case of tax-invoice fraud. The study is based on the analysis ofinterview results with the key informants. There are at least 22 models of tax-invoice fraud occurred on exports.Four main causes for the tax-invoice fraud: (1) the complexity in credit mechanism, (2) poor tax administration,(3) lack of tax audit, and (4) the culture of society. To anticipate the cases of tax-invoice fraud, the governmenthas issued several regulations and circulated letters, including carried out risk analysis in connection with theauditing on VAT refunds. |
