LTUs, RTOs fail to submit list of selected cases

SOHAIL SARFRAZ

ISLAMABAD: The income tax and sales tax audit exercise initiated by the Federal Board of Revenue under the National Audit Plan (2011-12) has suffered a major setback as not a single Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) has submitted list of selected audit cases for the Tax Year 2010.

The FBR on Wednesday issued stern warning to the Chief Commissioners of the LTUs and RTOs to submit the cases selected for audit on or before the deadline of November 22, 2011.

Through Board's instructions dated Nov 16, 2011, the FBR has further warned the heads of reformed units 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.

Sources told Business Recorder here on Wednesday that the FBR had issued 'National Annual Audit Plan 2011-12' to the field formations for carrying out audit of 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.

The FBR Taxpayer Audit Wing has totally failed to implement the National Audit Plan (2011-12) at the level of the field formations. The delay in finalization of the lists of cases selected for audit by the LTUs/RTOs shows poor monitoring of the audit authorities and their failure to implement key reforms indicator in the tax administration. This has been clearly reflected in the letter dated November 16, 2011 issued by FBR Taxpayer Audit Wing to the Chief Commissioners of the LTUs/RTOs.

The FBR letter issued by Waqar Ahmad Chief Taxpayer Audit-II to the LTUs/RTOs revealed, kindly refer to the Board's earlier letter in which National Audit Plan was issued for the Tax Year 2010. The Plan aimed at providing guidance for identification and processing of cases selected for audit for the Tax Year 2010 and corresponding period of Sales Tax. Around two and a half months have lapsed since release of this document and Board has not yet received either the lists of cases selected for audit or Monthly Audit Performance Report from a single LTU/RTO. It may please be appreciated that time left for conducting audit and subsequent collection of taxes is very short and is further reducing day by day. The occasion demands that a concerted effort be made to process audit in a more swift and comprehensive manner. The Chief Commissioners are requested that audit which is the core function of field formations, may be given due attention and be supervised personally, FBR said.

The FBR added that the list of cases selected for audit for the Tax Year 2010 alongwith prescribed Audit Performance Report (format attach with NAP) up to October 2011 may please be provided to the Board by November 22, 2011 positively, the FBR instructions added.