Pakistan recently approved the audit policy 2017 for the fiscal year 2016. Under the policy, Federal Board of Revenue (FBR) has already selected 44,868 cases for audit through computer balloting. Salaried persons will be exempted from selection for audit as “the FBR wants to focus only on the areas that have the potential to pay tax.”
Apart from that, the cases picked for audit this year will not be selected again for next two consecutive financial years.
Overall, the following exemptions have been made for sales tax, federal excise, and income tax audits.
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Previously, it was announced that FBR will pick 7.5% out of the total 925,000 pending cases for the tax audit. However, after balloting only less than 4% cases have been picked by the board.
Special Assistant to Prime Minister on Revenue, Haroon Akhtar, told that the primary reason behind such staggering number of pending cases is FBR’s lack of capacity to conduct investigations. He added that the government is thinking of discarding the Section 214-D of the Income Tax Ordinance which is the reason behind the accumulation of cases.
Under all six categories in the Audit Policy 2017, following number of cases have been picked;
Talking about the amnesty scheme, Haroon Akhtar added;
The business community asked us for amnesty, we gave them the amnesty scheme; they asked us for lowering tax rates, we did that; in some cases, we gave them even more relief than what they had asked for and the entire purpose of facilitating the business community was to foster business activities, promote growth and generate more revenues in the process. We have delivered all that people had asked for, now pay your taxes.
He further added that General Headquarters (GHQ) is cooperating as well to bring armed forces’ personnel under the tax net. Haroon stated that “the GHQ wants its personnel to be law-abiding citizens.”