Non-availability of LTUs', RTOs' reports: FBR unable to take policy decisions on tax audit

The Federal Board of Revenue is facing serious problem in taking policy decisions on income tax and sales tax audit in the absence of audit reports for the Tax Year 2010 by Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs), which according to the FBR has created serious problems for the policymakers.
Sources told Business Recorder here on Thursday that the FBR has informed the field formations that the tax authorities are unable to take policy decisions to improve sales tax and income tax audit due to non-availability of the reports of the LTUs and RTOs on audit completion under the 'National Annual Audit Plan 2011-2012'.
At the same time, this lack of ability to take policy decisions on audit is causing embarrassing situation before the competent authorities. This has been revealed in the FBR instructions issued to the LTUs/RTOs on the "monthly audit report-latest progress in respect of cases selected for audits under National Audit Plan 2011-12 and their feeding in the system."
The existing pace of audit under the 'National Annual Audit Plan 2011-2012' has restrained the FBR from taking some key policy measures to improve overall performance of sales tax and income tax audit, sources added. According to the latest instructions issued by the FBR Taxpayer Audit Wing to the field formations, the FBR is referring to the Board's letter of even number dated September 26, 2011 followed by reminder dated October 26, 2011 on the results of audit for the Tax Year 2010.
"It is regretted to inform the Chief Commissioners of the LTUs/RTOs that progress reports for the months starting from August, 2011 to October, 2011 regarding selection of cases for audit, and their completion were neither sent to the Board nor TAMS was updated on that account. The FBR Taxpayer's Audit Wing needs consolidated data of audits conducted by the field formations under various categories of Taxpayers for policy analysis. The non-availability of this vital information not only impedes progress in making policy decisions but also cause embarrassment when some information related to audits is required by higher authorities for their considerations," FBR audit instructions stated.
In view of the current situation, FBR Taxpayer's Audit Wing has requested the Chief Commissioners of the LTUs/RTOs that reporting mechanism may carefully be regulated in field office and a report in this regard may be sent to the Board on prescribed format on monthly basis, the FBR instructions added.
In the past, through Board's instructions dated November 16, 2011, the FBR has asked the heads of reformed units to that time left for conducting audit and subsequent collection of taxes is very short and field formations should immediately compile lists of cases selected for audit for the Tax Year 2010.
The FBR had issued 'National Annual Audit Plan 2011-12' to the field formations for carrying out audit of and sales taxpayers including corporate sector, Association of Persons (AOPs), business individuals and withholding agents under risk-based audit selection criteria for income tax sales tax and federal excise duty.