FBR selects 14,164 tax cases for audit

ISLAMABAD: The Federal Board of Revenue (FBR) Thursday selected reduced number of audit cases to the tune of 14,164 for income tax, sales tax and federal excise duty through parameter-based computer balloting in order to create effective deterrence for under filers.

The number of selected audit cases reduced from 45,000 last tax year to just over 14,000 for tax year 2017, whereas the FBR Chairman Jehanzeb Khan stated that the FBR would focus on ensuring quality of conducting professional audit instead of taking care of quantity only.

“We are now developing actionable data with the help of Nadra on the basis of luxury consumption pattern of life.

There will be 360 degree turn in terms of actionable data as earlier the data provided by Nadra was not enough to take any effective action, but now the FBR would be able to bring 0.3 to 0.4 million new taxpayers for broadening of tax base,” Minister of State for Revenue Hammad Azhar said on the occasion of selection of audit under policy of 2018 and launching new website of the FBR here.

The minister said the property valuation rates would be brought at par with market rates but promised that when the valuation rates would be jacked up then the taxation rates would be reduced.

For selection of audit cases, out of 477,374 income tax cases, the FBR has selected 10,982 cases for audit (2.3 percent). Out of total 124,004 sales tax cases, the FBR has selected 3,126 cases for audit (2.5percent). Out of total 725 FED cases, the Board has selected 56 cases for audit (7.7percent) through push of computerised button.

Hammad Azhar said tax filers would be facilitated, while non-filers would have to face difficulties. He said the FBR made a major policy shift this year for selection of cases for audit by focusing on only high-risk income tax, sales tax and FED cases to ensure audit in a professional manner.

He said the Commissioners Audit powers to issue notice to the taxpayers for selection of cases for audit needs to be clearly defined. He said the tracking of notices issued in the field formations for audit needs be done on real time basis.

Hammad Azhar said the performance of the officers will also be evaluated and there working environment will be improved. He said technology will also be focused to further enhance the performance of the FBR. He said that in future tax filers will be facilitated while there will be issues for non-filers. He said reserving the foreign exchange is top priority for the government.

“I have also requested the FBR chairman to start work on regulating powers of field commissioners to issue tax notices and separate the assessment office from the consequential audit office,” he added.

Jehanzeb Khan said taxpayers would be contacted with the help of technology to end direct interaction between the taxpayers and tax officials. He said the FBR is bringing a number of fundamental changes in the audit policy to switch over from traditional audit techniques to a new approach to achieve the desired results.

He said the FBR classified high-risk or medium risk cases for audit. “If more number of cases were selected for audit, the exercise could not be done in professional manner. There is a big backlog of audit which needs to be cleared,” he maintained.