Business community would directly approach the Auditor General of Pakistan (AGP) to seek clarification on the legality of accessing taxpayer's record for external audit by the Directorate General of Revenue Receipt Audit (DRRA). Sources told Business Recorder here on Saturday that the issue of external audit notices by DRRA was discussed in the second meeting of the committee on tax facilitation at the Federal Board of Revenue (FBR).
The representatives of business and trade informed the FBR that the DRRA has sought taxpayer's record through Regional Tax Offices (RTOs). The record available with the taxpayers at their business premises has been demanded through external audit notices of the DRRA. The question arises whether the DRRA is empowered to use forum of the RTOs for issuing notices to the registered taxpayers?
Sources said that the field formations of the FBR are complying with the orders of the AGP (who is of the view that DRRA has legal backing to examine the record of the taxpayers) duly endorsed by the Public Accounts Committee. It was decided that the business community, through a representative, will clarify the issue with the AGP. The business and trade would ask the AGP to inform the FBR about the legality of DRRA audits, which will be conveyed to the FBR's field formations.
When contacted, a tax expert said that whether the AGP would give ruling against the DRRA, which is illegally demanding taxpayer's record through the FBR. The FBR should obtain the ruling from the Law and Justice Division instead of AGP, he added.
In the past, the board has repeatedly informed the AGP office to restrain external auditors from visiting business premises of the registered taxpayers for examination of sales tax and income tax records available with the units. The board had informed the department to allow external auditors to examine the record available with the tax department.
This means that the external auditors of the DRRA cannot access the record available at the business premises, factories or manufacturing units. However, the external auditors may examine sales tax record, income tax statements, challans including e-filing statements, withholding statements, input/output data, or any other record available with the tax offices.