Chief Commissioners asked to verify exemption certificates

The Federal Board of Revenue (FBR) has decided to verify exemption certificates (section 148 of the Income Tax Ordinance 2001) issued by the field formations by constituting teams of senior tax officials in large taxpayer units (LTUs) and regional tax offices (RTOs) to conduct field visits for verification exercise across the country. In this regard, the FBR issued instructions to the chief commissioners of LTUs/RTOs here on Thursday to verify each exemption certificates issued by the field formations.
According to the FBR, the Chairman FBR pointed out during last chief commissioners' conference that a number of exemption certificates issued during current fiscal year (2015-16) were much higher. Consequently, it has impacted the collection of taxes u/s 148 of the Income Tax Ordinance 2001. The chairman FBR and FBR Member (IR Operations) showed their concern in this regard and stated that due care should be exercised while issuing exemption certificates in accordance with the laid down procedure. It was accordingly decided that the field formations shall be extra vigilant in issuance of the exemption certificates.
It was further decided that the chief commissioners shall submit a detailed report regarding cases where exemption has already been granted by 20.01.2017. For future, a team of officials headed by an officer not below BS-18 shall be constituted, which would conduct field visit for verification of the facts in each case where exemption has been sought. Names of team members shall be communicated to the board. Progress report of all application received for grant of exemption shall be submitted by 25th of every month, the FBR maintained.
All exemption certificates must be issued in strict accordance with relevant provisions of law and SROs issued by the FBR. During the conference, the chairman FBR highlighted the urgent requirements of conducting desk audits, field-audit of withholding taxes, monitoring of new taxation measures such as real estate taxation, monitoring of non-filers and detailed scrutiny of the registered persons to whom the supplies have been shown. He instructed the field formations to ensure that exemption certificates were issued with utmost care and after observing all necessary verifications as enjoined by Law and FBR circulars. He further stated that monitoring of withholding taxes with the AG offices must be improved with the help of newly-developed software, the FBR added.