FATE objects to centralised selection of audit cases

The Federal Board of Revenue is facing internal resistance in implementation of the tax policy of "centralised selection of cases for tax audits" following ineffective experiment of centralised selection of audit cases through computerised system at the level of the FBR for 2010-11. Sources told Business Recorder here on Wednesday that the FBR's Facilitation and Taxpayer Education (FATE) has submitted its comments on the proposed reforms under the Resource Mobilization Program (RMP) of the FBR.
The RMP is a one-year reform program of the FBR for 2012-13. According to the comments of the FBR's FATE Wing: We object to centralised selected tax audits. Under international best practice, selection of cases for audit is done manually only short listing is done by computer. Moreover, the earlier experiment of 2010-11 on centralised selection by computer at FBR has not been effective.
Under the proposed reforms, the FBR will reach coverage of the number of risk-based and centralised selected tax audits to at least 30 percent of the large taxpayers in Large Taxpayer Units (LTUs), 5 percent of corporate taxpayers in Regional Tax Offices (RTOs) and 2 percent of the AOPs and individual businesses. On the proposed reform, the FBR FATE Wing commented that the Audit coverage by RTOs at 5% (Companies) and 2% AOP/Individuals is too high and should be reduced. The FBR FATE Wing further objected that there is no need to create a separate "Implementation "Wing" in FBR.
The Strategic Planning and Statistics (SP&S) Wing was established with the purpose of monitoring & implementing tax administration reform project. The new reform activity should also be undertaken in the said Strategic Planning and Statistics Wing. There is no justification to create a new "wing" in FBR in the name of "Implementation Wing". Instead posting to FBR's SP&S Wing may be of effective officers.
As per proposed reforms, the FBR will take action to reach a number of new active business registered taxpayers (including corporate, Association of Persons and individual businesses) to 100,000 in June 30, 2012 and new active salary individuals registered taxpayers to 110,000 by June 30, 2012.