The Federal Board of Revenue has made sales tax and income tax detections of over Rs 29 billion during (2007-08) through audit of 116 registered companies belonging to top documented sectors. Sources told Business Recorder on Tuesday that the FBR Audit Wing has made this huge detection after scrutiny and verification of tax records of the registered units under the national audit plan.
Break-up revealed that the composite audits of 116 taxpayers within the corporate sectors were conducted, resulting in massive detections of Rs 29 billion. The amount included the tax assessed during audit, amount evaded and other detections due to procedural irregularities committed by the taxpayers.
When asked why the detected amount is exceptionally high in one year? Sources said that major portion of Rs 29 billion included violation of section 73 of the Sales Tax Act 1990 and unpaid tax assessed during the audit proceedings in 2007. However, it is difficult to recover violation of section 73 of the Act, as the registered buyers and sellers never admit that they have made cash transactions bypassing banking channels.
Other detections included violations of Sales Tax Act, 1990 and Federal Excise Act by different leading sectors. Among other sectors, audit of 27 cement manufacturers and 79 sugar units is also in the final stages across the country.
Sources said that presently audit of selected units has been completed at Large Taxpayer Unit (LTUs) and the Regional Tax Offices (RTOs) in Karachi, Lahore, Rawalpindi, Faisalabad and Peshawar. As a result of verification, taxpayers have voluntarily started making payments. The department has also started recovery of the detected amount at the national level.
Sources said that the board is making efforts to increase the overall coverage of audit. The data sharing and verification of information from third party has opened new avenues for detection through audit. It would ultimately improve detections made through this exercise. Secondly, monitoring of auditors is a key element of the ongoing exercise, which has never been done in the past. Thirdly, the advance selection criteria have been applied in a transparent manner for selection of cases.
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