Forensic audit of telecom companies: amendments to relevant laws being sought

The Federal Board of Revenue (FBR), Sindh Board of Revenue (SBR), Punjab Revenue Board (PRA) and Khyber Pakhtunkhawa Revenue Authority (KPRA) and Pakistan Telecommunication Authority (PRA) would suggest amendments to the relevant laws, enabling them to conduct forensic audit of telecom companies.
Sources told Business Recorder on Sunday that the decision to have a combined audit of telecom companies was taken by federal and provincial tax authorities/boards (FBR, SBoR, PRA and KPRA). "If such legal provisions are not available in the tax and other relevant laws, amendments would be sought in the laws to get legal cover for conducting forensic audit of telecom companies," they added.
According to sources, the issue of combined audit of telecom companies was discussed at a recent meeting which was attended, among others, by chairmen of FBR, Sindh Board of Revenue, Punjab Revenue Board and Secretary Khyber Pakhtunkhawa Excise & Taxation Department and officials of Khyber Pakhtunkhawa Revenue Authority at the FBR House.
Highlighting the issues pertaining to declarations made by telecom companies in their returns, FBR chief suggested that to ensure realisation of potential revenue, a combined forensic audit of telecom companies, on behalf of all revenue agencies, be conducted so as to plug loopholes and leakages. All the participants of the meeting agreed to the proposal. It was also agreed at the meeting that such audit would also cover the payment of income tax by the telecom companies.
The meeting on this occasion set up a committee, comprising representatives of each agency as well as PTA, for submitting a report in this regard. The committee to be headed by chief commissioner of Large Taxpayer Unit (LTU), Islamabad, has been assigned the task of formulating its report keeping in view the following aspects.
With respect to the forensic audit, the committee will (a) prepare terms of reference (TORs), and (b) suggest legal provisions to be included in relevant laws, enabling conducting of such audit, if such provisions did not exist, at present.
It has also been decided that a joint methodology will be chalked out for sharing of information between revenue authorities.
Participants of the meeting also agreed to conduct joint forensic audit of the telecom companies to check their exact sales tax/federal excise duty and income tax payments. The FBR, SBoR, PRA and KPRA would facilitate engaging third party for conducting joint forensic audit of the telecom companies.
The sources said that such a move has been necessitated in the wake of reports that telecom sector has not deposited sales tax in proper manner.