Member Audit, Central Board of Revenue (CBR), Abdur Razzaq has said that under the National Audit Research Project, the process of audit at Large Taxpayer Units of Lahore and Karachi is going on smoothly and it will be extended to the third LTU in Islamabad, shortly.
Initially, 35 cases for audit had been selected and the process of LTUs audit would be completed in around three months and then it would be extended to corporate sector and non-corporate sector, he told newsmen at a post budget seminar on proposed moments in sales tax and income tax, here on Wednesday. The seminar was hosted by Directorate of General of Training & Research Lahore (DOT).
In addition to initiating audit at LTUs, the CBR is also imparting on job training to the auditors to make the process more transparent, he pointed out. He said that on the basis of the data collected for the LTUs audit the process would be started for corporate sector and subsequently in non-companies.
He said that the non-corporate sector is a disorganised sector and we may face certain problems in this area, particularly in data collection. "First of all we will address these problems and, if needed, workforce will be enhanced."
The member CBR said that the whole process would be transparent, professional and discussion-free and the exercise for all sectors, including corporate, non-corporate would be completed in three years.
Director General LTU Lahore Omer Farooq said they received signal for the audit in February this year and since then the process had been continuing. "For the first time we are conducing composite audit of sales tax, income tax and federal excise and five units have been selected for the purpose."
"Moreover, we are also conducting research based audit, adding that during this exercise our teams have detected Rs 800 million sales tax evasion in paper and Rs 250 million in case of synthetic leather sectors. Our focus is on quality rather than quantity and keeping in view this we are developing parameters for the process."
About revenue collection, he said that the LTU Lahore would meet its targets by June 30, 2007 in sales tax, income tax and federal excise duty. "Initially, we were assigned a target of Rs 8 billion for the income tax, which we achieved in December 2006."
Later, the CBR enhanced this target to Rs 15.3 billion, which would also be achieved, he hoped. For sales tax, Rs 21 billion had been collected while the LTU Lahore was also ahead of target in case of FED, he stated.
Earlier, addressing the seminar the speakers highlighted the changes in sales tax and income tax proposed in the budget 2007-08. According to some speakers, the issue of fake invoices was a global phenomenon and could not be overcome. Upon this, the Member CBR (Audit) Abdur Razzaq, who presided over the seminar, said that the CBR was working on security printing to overcome the issue of fake invoices.
Asim Zulfiqar, senior manager, AF Ferguson highlighted the amendments in the budget regarding computation of banks income, proposed reduction in rate of final tax for retailers, advance tax.
He said that under the amendments now a company was required to pay advance tax even in first year of its operation. He also spoken in length in the proposed amendments in tax collection at import stage, payment for goods and services, tax on dividend income of companies, tax holiday provided for the micro-finance banking etc.
Akhtar Ali Naeem, ex-collector sales tax, made his observations about the amendments made in sales tax. He also answered the questions of the audience regarding changes in input and output tax and supply of goods and zero rate tax on supplies, ADR, adjustable tax and issuance of refunds.
Nadeem Ahmed Farooqi, additional commissioner RTO Karachi, spoke on amendments in the second schedule, which pertains to private equity and venture capital funds, micro finance bank, distribution out of taxed capital gains, corporatisation of stock exchanges etc.
While wrapping up the seminar, DG LTU Lahore Omer Farooq said that such programmes were equally beneficial for taxpayers and the tax officials. He, however, expressed disappointment over the thin attendance of the taxpayers.
Earlier, Director General DOT M Munir Qureshi shed light upon the objectives of this seminar and said that tax revenue receipts of the government were on the increase and taxpayer response was very encouraging. That was why now the revenue target had been fixed at over one trillion rupees. "Now we need to put in additional efforts to achieve this target," he added.