Taxpayers paying 25 percent more income tax than 2013: FBR may grant immunity from income tax audit for 2014

Federal Board of Revenue (FBR) is all set to grant immunity from income tax audit for the tax year 2014 to the taxpayers, who will pay 25 percent more income tax on the declared tax for the tax year 2013, it was learnt here on Thursday. According to sources, Vishno Raja Qavi, chief Income Tax policy II, during a recent visit to Karachi hinted that the board was considering the proposal of Karachi Tax Bar Association (KTBA) for granting immunity from income tax audit for the tax year 2014 to the taxpayers, who would pay 25 percent more income tax on the declared tax for the tax year 2013.
They said that Vishno during his Karachi visit asked the KTBA to send recommendations in this regard for policy decision. Keeping this in view, the KTBA has sent its proposal to the chairman FBR. The KTBA in its recommendations said that a number of cases had been selected for income tax audit for the tax year 2014. It said that most of the cases' notices had been issued and preparing and filing the required details and documents were under the process of submission before the tax authorities.
The KTBA further said that the audit proceedings took considerably longer time as the process was time consuming and cumbersome, coupled with the fact that all the tax practitioners were actively preoccupied with the filing of returns for the tax year 2015 for which the date had been extended till February 29, 2016.
Considering the above difficulties, the KTBA has requested the chairman FBR to look into the matter that if a taxpayer pays 10 percent (or any other reasonable percentage) more income tax on the declared tax for the tax year 2013, audit in such cases will be closed accordingly and those who do not avail this option can be processed under normal proceedings available for the purpose of audit.
Moreover, the KTBA hoped that this decision would not only fetch revenue to the exchequer but it would also save the precious time of the field officers and the practitioners who were presently under high pressure with the compliance of returns / statements, monthly statements and Voluntary Tax Compliance Scheme (VTCS). It said that immunity from audit and incentive had been generously provided under VTCS to non-complaint taxpayers, therefore, justice demands that immunity from audit, subject to higher payment of income tax as compared to tax year 2013, may also be allowed to the compliant taxpayers.
The KTBA also drew the attention of FBR chairman to the exclusion clause/part of Audit Policy for the year 2015 in which FBR have only excluded cases for the tax year 2013 earlier selected for audit u/s 214C of Income Tax Ordinance, 2001, u/s 72B Sales Tax Act, 1990 and u/s 42B of the Federal Excise Duty Act 2005.
The KTBA in its recommendations said that those cases manually selected for audit and for which audit was conducted manually by the Commissioners, Inland Revenue under the relevant statute may also be excluded from audit proceedings for the tax year 2014.