Wednesday, September 23, 2015

Salient Feathers of Audit Policy for Tax year 2014 by Federal Board of Revenue (FBR)

The Federal Board of Revenue has announced Audit Policy for tax year 2014. Salient features of Audit Policy 2014 are:

The Board should select cases for audit through random ballot
The Commissioners Inland Revenue shall select a minimum of 5% and maximum up to 10% of the cases under his jurisdiction by exercisng his powers u/s 177 of the Income Tax Ordinance 2001.
The Commissioner or the Board may select a class of taxpayers.
All notices issued to the cases selected for audit for 2014 should contain IRIS/TAMS generated barcode.
There are other instructions which are to make the audit procedure transparent and taxpayers friendly. But the question is: Is transparency in audit for 2014 is possible.

In Pakistan audit does not mean audit of a tax affairs of a taxpayer. Rather it is a good news for the corrupt Officers and officials that now they are authorized to grab some gratification from the taxpayers. No doubt there are certain honest Officers but it is an undeniable fact that most of the officers/officials are corrupt and they give bribe to the others to get lucrative posting. Audit wings are ideal for such officials.

So before selection of cases for audit, it is necessary for the FBR to purity itself from the corrupt officers of FBR. Moreover, FBR has a voluminous information which is obtained from different departments regarding purchase of movable and immovable properties and information regarding tanking transactions. In case FBR just give due importance to such information and post the honest officers on such posts, there will be no budget deficit and collection of tax will be more than reasonable. 


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