Audit regime: FBR proposes major policy measures

The Federal Board of Revenue (FBR) has proposed some major policy measures to bring changes in the audit system through special audit guidelines for oil and gas, banking and telecommunication sectors to the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) for improving revenue collection from leading sectors of the economy.
Sources told Business Recorder here on Sunday that the FBR Member Taxpayer Audit Hafiz Muhammad Anis had forwarded some innovative ideas to introduce changes in the audit regime of the FBR under new reform programme.
The proposals of the FBR Taxpayer Audit Wing are expected to be made part of the new reform programme in 2012-2013.
According to sources, the FBR will bring elaborate changes in procedural and auditing sectoral manual of oil & gas, banking, telecom, etc. Presently, the FBR has audit guidelines on some of the sectors of the economy eg sugar, beverages and spinning etc for Sales Tax Audit. However, the need for preparation of guidelines/notes/manual for the field audit staff, on major sectors of economy (oil & gas banking, telecom, etc) and that too for joint audit of both direct and indirect taxes, is felt since long. Therefore, in case the proposed project when green signal is given, then a suitable local audit consultant may be engaged for drafting audit guidelines on major sectors like oil and gas, banking, telecom, etc.
On the proposal of designing of a manual for joint auditing procedures between Customs and Internal Revenue for LTUs, sources said that over the period, the FBR had developed a capable and trained audit staff to cater to the needs of joint audit of Direct & Indirect Taxes. Furthermore, the FBR had separate audit manuals on Sales Tax and Post Clearance Customs Audit for guidance of the field staff, they added.
As far as training of audit staff was concerned, sources said that the training needs of the audit staff might be catered for by the Human Resource Management (HRM) Wing of the Board.
Sources said that the software for risk based selection for audit had already been developed with the help of the Pakistan Revenue Automation Limited (PRAL) and was being used hence the need of engagement of outside firm in this respect was not warranted.
Sources added that the FBR Taxpayer Audit Wing was making all out efforts to timely complete audit of the taxpayers which had been selected through computerised balloting. The electronic data of the selected taxpayers had already been communicated to the E-Folders of the officials concerned of the LTUs/RTOs for audit purposes, they said.
The audit of selected persons has been started in the field formations. There is no compulsion in the income tax law to make computerised balloting publicly or announce such computerised balloting in public.