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September 19, 2020

FBR picks 12,533 cases for tax audit; amnesty beneficiaries safe


September 19, 2020

ISLAMABAD: The Federal Board of Revenue (FBR) on Friday selected 12,533 cases through computerised random balloting to conduct auditing for income and sales taxes and federal excise duty despite previous assurance of holding audit for three years.

Earlier, the FBR announced the cases for audit would not be selected for the next three years, but in the ceremony held at the FBR headquarters they were included in the audit list.

The selection of audit cases has been done under the tax policy 2019, according to officials. Adviser to Prime Minister on Finance Hafeez Shaikh and FBR Chairman Javed Ghani presided over the ceremony.

The FBR selected audit cases through parameters based random computerised balloting thus selected 10,441 cases for income tax or 0.76 percent of total received returns, 2,065 cases for sales tax or 1.67 percent of total 123,486 returns and 27 cases for federal excise duty out of total 439 returns.

Adviser Shaikh said the FBR made tax system transparent and therefore the selection was made through parameters based on random selection of computerised balloting instead of allowing tax officials to use discretionary powers.

The adviser said the FBR reduced number of selected cases of audit to make the deterrent effective.

“The FBR kept certain taxpayers, such as salaried individuals having single source of income in shape of salary and those who availed last tax amnesty untouched,” he said.

Shaikh said efforts are underway to make tax system equitable.

“There is no other solution to collect taxes for construction of infrastructure, roads and bridges and meeting requirements of health and education,” he said. “We have to collect taxes instead of picking up begging bowl to borrow from abroad. Efforts were made to reduce the burden and therefore no new taxes were imposed in the budget for 2020/21.”

Despite facing economic difficulties, the adviser said the government provided subsidy on electricity and gas to exporters. There is no tax on export sectors. There were complaints related to issuance of tax refunds and the government doubled refunds amount to Rs240 billion in the last fiscal year.

“Now the income tax refunds would be accelerated,” he added.

The finance adviser said refunds process for five export-oriented sectors have been streamlined through online system. The refunds are cleared without wasting any time. Income tax refunds amounting up to Rs100,000 were already paid out and now the refunds of up to Rs50 million would be repaid. Out of Rs40 billion, the FBR issued Rs28 billion and another Rs12 billion would be released soon.

The adviser said the businessmen were made part of technical committees to resolve their genuine problems.

“The effects of coronavirus are minimising and now the economic activities would be heading towards normalisation as exports went up in July,” he said. “The restoration of economic activities will help creation of job opportunities in the country.”

Shaikh said the reform process will continue with support of the private sector.

Ghani said the tax system operates on the basis of self-assessment and voluntary tax compliance is important part of the system.

“The cases of audit were made on scientific basis and number of cases has been reduced to undertake the exercise in effective manner,” he said.