ISLAMABAD: Advisor to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Sheikh Friday made public tax directories of parliamentarians and all taxpayers, and conducted random balloting for selection of 12,533 cases for audit of income tax and sales tax/excise duty for Tax Year 2018. The selection of audit cases has been done in a ceremony arranged here at the Federal Board of Revenue (FBR)'s headquarters on Friday.
Advisor to the PM on Finance Dr Abdul Hafeez Shaikh and FBR Chairman Javed Ghani presided over the ceremony.
The FBR has approved Audit Policy, 2019 for tax year 2018, and selected cases of income tax, sales tax and the Federal Excise Duty (FED) for audit on the basis of risk-based parameters through computer balloting here on Friday.
Hafeez Sheikh stated that a total amount of Rs800 million had been deposited as tax by the parliamentarians belonging to the National Assembly and the Senate for the year ending June 2018.
Around Rs340 million has been deposited as tax by provincial assembly members in all the four provinces during the same period.
He said that the Rs608 billion tax had been deposited by individual taxpayers during the tax year 2018.
Hafeez Shaikh stated that this year, audit policy focused on selection of minimum cases for audit to ensure audit process in a transparent manner. Tax audit would not be left to the discretion of the tax inspectors and tax officials.
A very small percentage has been picked for audit to ensure its completion without causing harassment to the taxpayers.
Last year, around 14,000 taxpayers were picked for audit, and the exercise remained incomplete.
This year, it has been decided that the number of taxpayers picked for audit should not be more than 10,000 cases, he stated.
Out of the total filers, 0.76 percent of income tax cases were selected for audit, and 1.67 percent sales tax cases were picked for audit.
The FBR selected 10,441 income tax cases for audit through random computer balloting (0.76 percent).
The FBR selected 2,065 sales tax cases for audit out of total 123,486 cases (1.67 percent).
The FBR picked 27 cases of the FED for audit, out of total 477 cases (5.64 percent).
On this occasion, Advisor to the PM on Finance Dr Abdul Hafeez Shaikh said that the FBR made tax system transparent, so the decision was made for selection of audit cases through parameters-based random selection of computerised balloting instead of allowing tax officials to use discretionary powers.
He said that the FBR reduced number of selected cases of audit in order to make this deterrent effective.
He said that the FBR made certain exclusions such as salaried individuals having single source of income in shape of salary, and those who availed last tax amnesty.
He said that efforts were underway to make tax system equitable and there was no other solution to collect taxes for construction of infrastructure, roads and bridges and meeting requirements of health and education.
"We have to collect taxes instead of picking up a begging bowl to borrow from abroad," he said, and added that efforts were made to reduce the burden, so no new taxes were imposed in the last budget for 2020-21.
Despite facing economic difficulties, he said that the government provided subsidy on electricity and gas to exporters, adding that there was no tax on export sectors.
He said that there were complaints related to issuance of tax refunds as the government doubled refunds amount to the tune of Rs240 billion for fiscal year that ended on June 30th, 2020.
Now the income tax refund payments would be accelerated.
He said that the five export-oriented sectors refunds were streamlined through the FASTER system, and in case of Form-H, the refunds amount would be cleared without wasting any time.
For income tax refunds, he said that the refunds amount up to Rs100,000 were already paid out, and now the refunds up to Rs50 million would be repaid.
Out of Rs40 billion, the FBR issued Rs28 billion and another Rs12 billion would be released soon.
He said that the businessmen were made part of technical committees in order to resolve their genuine problems.
He said that the effects of the coronavirus were minimising, and now the economic activities would be heading towards normalisation as exports went up in July 2020.
The restoration of economic activities will help creation of job opportunities in the country, he maintained.
He said that the reform process would continue with the support of the private sector.
The FBR Chairman, Javed Ghani, said that Pakistan tax system operated on the basis of self-assessment, where voluntary tax compliance was important part of the system.
The cases of audit, he said, were made on scientific basis as the number of cases was reduced in a bid to undertake this exercise in an effective manner.
Advisor to PM on Finance Dr Abdul Hafeez Shaikh, Chairman FBR Javed Ghani, and representatives of business community pushed the computer button to select 12,533 cases for audit purposes.
Copyright Business Recorder, 2020