921 corporate, AoPs selected for audit

ISLAMABAD: The Federal Board of Revenue (FBR) on Friday selected a total of 921 taxpayers in two different categories of corporate cases and Association of Persons (AoPs) through computerised random balloting for audit of domestic taxes.

Out of the total selected, 468 are corporate taxpayers and 453 are AoPs. Figures released at the balloting ceremony showed a total of 42,148 companies are registered for income tax and 9,871 companies for sales tax purposes.

Because of the composite audit, only those companies registered both for income and sales taxes were included in the balloting. The number of these companies totalled 9,365 and only 5 per cent of these companies were selected for audit.

Similarly, out of 146,594 AoPs a total of 9,034 were paying both income tax and sales tax and five per cent were selected for audit.

The FBR has now decided to re-activate the role of audit in its efforts to increase the tax-to-GDP ratio by ensuring compliance of laws. In this regard, a separate ‘Taxpayers Audit Wing’ has already been established at FBR headquarters to devise the strategy and oversee the process of tax auditing countrywide.

Speaking on the occasion, FBR Chairman Suhail Ahmad said the process of audit was launched after a gap of five to six years, not aimed at generating revenue but to create a sense of realisation that the taxpayers were being monitored.

In order to maintain the audit process transparent, the Institute of Chartered Accountants of Pakistan (ICAP) had been tasked to engage auditing companies. ‘There will be no harassment, no pick-and-choose or no targeting,’ he declared.

According to Member Audit Enforcement Hafiz Muhammad Hanif, the FBR had already notified names of the chartered accountant firms as provided by ICAP. However, audit of AoPs would be conducted by the auditors of the departments.

Detailed instructions were issued by FBR on Friday to the field formations to ensure that only honest, efficient and hard working auditors are assigned for this purpose without causing any harassment to the taxpayers, he said.

The FBR chairman said the government was determined to facilitate and provide friendly environment to taxpayers for clearing the legitimate tax without fear of any harassment under the Self-Assessment Scheme.

‘The tax-to-GDP ratio is less than 10 per cent and to increase this ratio it is not wise to put burden on those who are already paying taxes, rather we would look for those who are not in the tax zone,’ the FBR chairman said.

Mr Suhail said a coordinated mechanism would be developed among the departments like Nadra and public utility departments to assess the tax volume of taxpayers.