ISLAMABAD: Finance Bill 2026 has increased sales tax audit powers of the Inland Revenue officials from July 1, 2026.
Explaining the proposed provision, tax experts said that the proposed amendments to section 25 of the Sales Tax Act introduce additional powers and procedural changes in audit proceedings.
A new sub-section 8A empowers the Commissioner, with prior approval of the Chief Commissioner, to direct a registered person to have accounts re-audited by an accountant or inventory re-valued by a cost accountant in cases involving complex accounts, high transaction volumes, doubts regarding correctness of records, multiplicity of transactions, or specialized business activities.
The accountant or cost accountant will be nominated by the Commissioner from a panel approved by the Board.
New sub-section 8B requires the Inland Revenue officer to issue a formal audit report after completion of the audit and after obtaining the taxpayer’s explanation on all audit issues. The report will contain audit observations and findings.
Consequential amendments have also been proposed in sub-sections (9) and (11). The reference to “completion of audit” has been replaced with “issuing the audit report.”
Further, the wording relating to payment of tax during audit proceedings has been revised, and the requirement under the second proviso has been relaxed from payment of the full amount to payment of fifty percent of the amount involved.
The term “Accountant” has not been defined in the bill as the term may create ambiguity.
It is also worthwhile to consider whether the “accountant” referred in the proposal is allowed to perform a re-audit as per their by laws or regulations, they added.
Copyright Business Recorder, 2026
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