IR, Customs and PCA: directorates put under FBR Member Taxpayer Audit

The functioning and administrative control of the Directorate General Internal Audit (Inland Revenue), Directorate General Internal Audit (Customs) and Directorate General of Post-Clearance Audit Customs have been brought within the administrative control of FBR Member, Taxpayer Audit, considerably enhancing the powers of the audit authorities.
Sources told Business Recorder here on Saturday that the FBR has also changed the merger of functional specialisations of audit, legal, information policy, human resource and enforcement in Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) at Commissioner's level.
The position of the Commissioner (Audit) would be separated in the LTUs/RTOs and the separated position would be restored from July 1, 2012. The proposed position of Commissioner (Audit) in the LTUs/RTOs would directly report to the Member Taxpayer Audit which would curtail the powers of the FBR Inland Revenue Wing.
These decisions had been taken in a recent meeting on the audit functions chaired by FBR Chairman Salman Siddique. The meeting was also attended by FBR Member Taxpayers Audit and representatives of the Competitive Support Fund (CSF) of the USAID, including Abdullah Yusuf and Habib Fakhruddin.
According to the decision, in order to strengthen the Taxpayers Audit Wing of the FBR and ensure effective utilisation of audit function in the field formations, it has been decided that the Directorate General Internal Audit (Inland Revenue), Directorate General Internal Audit (Customs) and Directorate General of Post Clearance Audit Customs have been placed under the control of FBR Member Taxpayer Audit.
In this connection, the FBR Management/Administrative Wing will issue a notification to implement the decision. It has also been decided that the reporting line ie personal evaluation report (PER) of Directorate General Internal Audit (Inland Revenue), Directorate General Internal Audit (Customs) and Directorate General of Post-Clearance Audit Customs and their subordinate officers would also be changed and placed under the control of the Member Taxpayer's Audit. Thus, the officials of these directorates have been placed under the control of the Member Taxpayers Audit.
Sources further stated that the merger of the functional specialisations of audit, legal, information policy, human resource and enforcement in LTUs and RTOs at Commissioner's level have led to the conflict of duty and interest. For example, after issuing refunds to taxpayers, the same Commissioner later conducts post-refund audit under his supervision. This shows a clear conflict of interest/duty which compromises the independence of auditors in many ways. Hence, placing all hats on one head and in particular audit function is neither in the interest of revenue nor the officers concerned. Therefore, it has been decided that the merger should be undue and at least the position of Commissioner Audit should be separated and restored with effect from July 1, 2012.
The reporting line of the Commissioners Audit would be changed from Member Inland Revenue (IR) to Member Taxpayer Audit for PER purposes. This would take away the powers of FBR Member IR to deal with the audit related functions and empower the Member Taxpayer Audit to supervise and control all such audit related activities in the field formations, sources added.