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FBR balloting on Friday to select 0.76pc cases for audit

FBR balloting on Friday to select 0.76pc cases for audit

ISLAMABAD: Following the Audit Policy-2019, the Federal Board of Revenue (FBR) will hold parametric computer balloting here on Friday (September 18) to select cases for audit for the Tax Year-2018.

Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Sheikh and Chairman FBR, Muhammad Javed Ghani are also scheduled to address the balloting ceremony.

The board had approved the Audit Policy-2019, pertaining to Tax Year-2018, during the last week of August 2020, FBR sources said adding that the policy would apply to persons or classes of persons falling under all or any of the three domestic Federal Tax Statutes i.e. Income Tax Ordinance 2001, Sales Tax Act 1990, and Federal Excise Act 2005.

The criteria for selection of cases (for all taxes) for Tax Year-2018 would be parametric and the cases would be selected on scientific approach, for which a software “Risk Based Audit Management System” (RAMS) has already been designed and put in place.

The software would enable FBR to focus on cases with maximum non-compliant taxpayers while facilitating compliant taxpayers and building the confidence of taxpayers in the Audit system, the sources added.

The computer balloting would be conducted through Risk Based Parameters for selection of 0.76% of cases for audit out of the total filers after exclusions in Income Tax for the Tax Year-2018.

For Sales Tax and Federal Excise Duty, the FBR would select 1.67 % and 5.65% cases for audit respectively out of the total filers after exclusions for tax periods corresponding to accounting period adopted for the purpose of returns of Income Tax, for Tax Year-2018.

In order to facilitate the taxpayers, FBR had approved certain categories of the taxpayers to be excluded from selection i.e. those picked up for investigations by FBR Intelligence & Investigations Wing, all cases where income chargeable to tax under the head salary and /or pension exceeds 50% of taxable income, except cases having business income.

Directors of companies do not qualify for this exclusion, the sources added. All cases where entire income is covered under Final Tax Regime (FTR), all cases where declaration has been made under the Voluntary Declaration of Domestic Assets Act, 2018, all cases where declaration has been made under the Asset Declaration Ordinance, 2019 and Federal, Provincial and Local Government Departments, have also been excluded.

As per law, the Parameters for selection of cases for audit are confidential and hence would not be disclosed.

The sources said that the Audit Policy, 2019 pertaining to Tax Year-2018 has also been placed on the website of the board.