By:Naveed Ahmad Khan
Ceremony for Parametric computer balloting as per the Audit Policy, 2019 for selection of cases for audit for Tax Year 2018 in respect of persons or classes of persons falling under all or any of the three domestic Federal Tax Statutes i.e. Income Tax Ordinance 2001, Sales Tax Act 1990, and Federal Excise Act 2005 was held at Federal Board of Revenue, Headquarter, Islamabad. On this occasion, Advisor to the Prime Minister on Finance & Revenue, Dr. Abdul Hafeez Shaikh, representatives of Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Institute of Chartered Accountants of Pakistan (ICAP), Pakistan Tax Bar Association (PTBA), Islamabad Chamber of Commerce & Industry, Islamabad Women Chamber of Commerce & Industry, Rawalpindi Chamber of Commerce & Industry, All Pakistan Tax Advisors Association and FBR’s Officers were present.
The criteria for selection of cases (for all taxes) for Tax Year 2018 is risk based and parametric. Cases have been selected on scientific approach for which a software has been designed and put in place named as “Risk Based Audit Management System” (RAMS). This software empowers Federal Board of Revenue to focus on non compliant taxpayers and thus facilitate compliant taxpayers helping build confidence of taxpayers in the Audit system.
Chairman FBR Muhammad Javed Ghani said that FBR is working on the principles of transparency, simplicity and predictability and informed that certain categories of the taxpayers are excluded from selection i.e. those picked up for investigations by FBR Intelligence & Investigations Wing, all cases where income chargeable to tax under the head salary and /or pension exceeds 50% of taxable income, except cases having business income. Directors of companies do not qualify for this exclusion. All cases where entire income is covered under Final Tax Regime (FTR), all cases where declaration has been made under the Voluntary Declaration of Domestic Assets Act, 2018, all cases where declaration has been made under the Asset Declaration Ordinance, 2019 and Federal, Provincial and Local Government Departments, have also been excluded.
The Advisor to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh in his address to the participants of ceremony said that the selection of audit cases would be computerized and on risk basis. The advisor also explain that minimum number of cases are being selected for audit by focusing on only high-risk Income tax, Sales tax and FED cases so that audit cases should be completed appropriately and within time. This will also help in reducing the complaints of taxpayers about harassment and corruption. In addition to this, the exclusions in Audit Policy will minimize the undue hardships faced by taxpayers.
Dr. Abdul Hafeez Shaikh also hoped that FBR will continue to improve its standards by providing services to both the government departments and the taxpayers. Against this backdrop, FBR has published Annual Tax Directories 2018 which contains the tax details of common taxpayers and members of the Senate of Pakistan, National as well as Provincial Assemblies so that people of Pakistan can access information.
He further added that this time no new tax has been imposed under current Budget to provide relief. The Advisor assured the business community of his full support and expressed hope that the future is more promising for Pakistan’s Business sector. For this, government has also provided subsidies to Export Sector. FBR has taken initiative to sanction more sales Tax refunds this year than in previous year. For this, FBR has introduced the online FASTER system so that refund claims are processed without involvement of tax officials. In order to further build up the taxpayers confidence, two committees are constituted for redressal of complaints against FBR comprising of Business Committee including representatives of FBR and Business individuals and Technical Committee for complaints about refund matters that would also include representatives from private sector.
In order to carry out parametric computer balloting, Mr. Abdul Hafeez Sheikh, Advisor to the Prime Minister on Finance and Revenue, initiated the ballot process by pressing the computer button for Income Tax Cases, Muhammad Javed Ghani Chairman FBR pressed button for Sales Tax and Mr. Aftab Hussain Nagra, President Pakistan Tax Bar Association pressed the button for Federal Excise Duty, Resultantly, the cases were selected for audit for Tax Year 2018. The number of cases selected for audit in a totally transparent manner in respect of different categories are detailed as under:
i. Income Tax (Corporate/Non-Corporate) – 10,441
ii. Sales Tax (Corporate/Non-Corporate)- 2,065
iii. Federal Excise Duty(Corporate/Non-Corporate)- 27
Total – 12,553
Keeping in view the facilitation of taxpayers, this year lesser number of cases have been picked up when compared with previous years. National Tax Numbers/ CNIC’s of cases selected for audit have been displayed on the official website of FBR. The Audit Policy, 2019 pertaining to Tax Year 2018 has also been placed on the website of FBR which can be accessed at https://www.fbr.gov.pk/taxpayers-audit/131228. Moreover, Mrs. Farida Rashid, President, Islamabad Women Chamber of Commerce & Industry and Mian Abdul Ghaffar, President, All Pakistan Tax Advisors Association pressed the button to launch the Tax Directory 2018 for Parliamentarians and Mr. Saboor Malik, President, Rawalpindi Chamber of Commerce & Industry and Mr. Khalillulah Shaikh, President, Institute of Chartered Accountants of Pakistan (ICAP), pressed the button to launch the Tax Directory 2018 for information of general public which can be accessed at https://www.fbr.gov.pk/tax-directory-for-tax-year-2018/152468. On this occasion, Mirza Abdul Rehman, Chief Coordinator, Federation of Pakistan Chambers of Commerce & Industry (FPCCI) expressed his pleasure that their demands are fulfilled for launching of Risk based Audit Management System (RAMS) and payment of long outstanding refunds of business community.