Taxpayers advised not to respond to illegal notices

Taxpayers should not respond to illegal notices of the Regional Tax Office (RTO), Islamabad where sales tax record has been demanded for external audit of the Directorate of Revenue Receipt Audit (DRRA). A senior FBR official told Business Recorder on Saturday that the issue of notices on behalf of the DRRA was also discussed during the commissioner conference.
The FBR has also directed the Chief Commissioners of Inland Revenue to withdraw audit notices pertaining to income tax and sales tax for past years and only focus on cases for audit (tax year 2008) selected through computerised random balloting of the FBR.
Sources said the notices of the RTO Islamabad where sales tax record has been demanded for external audit has no legal backing. "Taxpayers have been advised not to respond to such illegal notices. They should not waste their time in responding to such notices without legal basis, as the RTO Islamabad cannot demand record from registered units for external auditors of the DRRA", a top tax official said.
Meanwhile, the commissioner conference also discussed progress on the FBR Annual Enforcement Plan for Tax Year 2009. The FBR plan has directed the Director Generals (DGs) of Large Taxpayers Units (LTUs) and Regional Taxpayer Offices (RTOs) to focus on priority areas for getting information from sales tax records, import data, provincial department of industries, electricity/gas bills, income earners from immovable property, builders, developers and housing societies in order to unearthed potential tax evaders.
The Enforcement Plan for unregistered non filers, registered non filers/stop filers, non payment/short payment of taxes, prepared by the Enforcement and Accounting Wing of FBR revealed that the LTUs and RTOs were instructed to focus on 20 sources of information.
For non registered non-filers, the Enforcement Division will enlist new potentials on the basis of third party information like electricity, gas, telephone bills, imports, property and motor vehicle purchases, club membership etc and withholding tax statements, complete the requirement for NTN registration and send those cases to Pakistan Revenue Automation Limited (Pral).
According to the FBR instructions, field formations should focus upon all company cases, list of which can be prepared through third party information, registration of large and medium size businesses houses listing of which can be prepared from the sales tax records, import data, provincial departments, and electricity/gas commercial connection/consumption etc.
The priority list covers builders, developers and housing societies, hotel, restaurants, bakeries and confectioneries. The instruction also envisages plan to focus upon wholesale distribution, agency businesses including advertising and big retail businesses houses which do not exist on Master Index/National Tax Number (NTN).
The FBR would collect information about professionals, which can be obtained from their respective associations as well as income earners from let out immovable properties, information of which can be gathered from the provincial excise and taxation department and Cantonment Boards since they have information about let out properties.
The field formations would also focus on other income earners like profit on debt, salary/wages, dividend, Royalty, fee for technical services and prize bond winnings etc and information about non profit and social welfare organisations which can be obtained from provincial social welfare departments. In additional to the said priority areas, the Director General LTUs/RTOs may also identify priority areas for enforcing compliance from the high revenue potential non compliant taxpayers, enforcement plan added.