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September 22, 2019

FBR launches auditing of taxpayers


September 22, 2019

KARACHI: The Federal Board of Revenue (FBR) has launched audit of the taxpayers having sales tax registration after detecting huge gap in actual and estimated revenue collection, sources said on Saturday.

The sources said the FBR issued instruction to all chief commissioners of Inland Revenue to conduct audit of taxpayers who filed sales tax returns for July and August 2019.

The FBR said individuals falling under the zero-rated category should be given priority for selection of audit.

The revenue body said numerous amendments were made in Sales Tax Act, 1990 and Federal Excise Act, 2005 through Finance Act 2019 in order to bridge the revenue gap.

The FBR also withdrew the sales tax regime for manufacturers and export sectors through the Finance Act 2019.

The chief commissioners were asked to take immediate action against non-filers of sales tax returns for months of July and August 2019, especially those who are registered taxpayers and filed their returns for the period May and June 2019.

The FBR also stressed a need to conduct stock taking of sales tax registered persons for the period ended June

2019. Stock taking priority should be given to those taxpayers who are manufacturers and importers of consumer items for which retail price printing has been made mandatory.

The chief commissioners were advised to use information available on the FBR’s portal for analysis of sales trend.

Further, suppliers on the active taxpayers list should be monitored because majority of such taxpayers were nil or null filers.

The tax offices should initiate working on supplies of such taxpayers, the FBR advised.

The FBR also directed officials to conduct post refund audit for sanctioning of refund through fully automated sales tax e-refund system and expeditious refund system.

Regarding change in federal excise duty regime, the FBR directed officials to conduct monitoring of beverage sector in order to ensure that five percent federal excise duty on retail price was being charged and paid against supply of fruit juice, syrups and squashes, water containing added sugar or sweetening matter excluding mineral and aerated waters.

Federal excise duty on cement was increased from Rs1.5 per kilogram to Rs2 per kilogram, the FBR said. The tax offices should monitor the stock, production and dispatches of the sector.

The FBR advised the chief commissioners that investigative audit must be conducted in cases where the registered persons are showing negative value addition or high input-output ratio, continuous carry- forward and low output tax in order to create deterrence against tax evasion.