Enforcement plan to maximise revenue collection: FBR to conduct all companies'' desk audit

The Federal Board of Revenue (FBR) has decided to conduct desk audit of all companies and recover inadmissible input tax adjustment of sales tax and supplies made by blacklisted companies under the short-term enforcement strategy to maximise revenue collection in March-June period of 2010-11.
Sources told Business Recorder here on Sunday that the FBR has implemented a short-term enforcement plan to ensure maximum revenue collection in the remaining four months of current fiscal. The strategy has been made specifically to generate additional revenue in March-June 2010-11.
According to the FBR Plan, the field formations have been directed to conduct desk audit of all companies and recover due amount on top priority basis. The recovery of income tax from all companies for the current year would be completed by May 30, 2011.
Under the enforcement plan, the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) would ensure recovery of inadmissible input tax adjustment of sales tax and supplies made by blacklisted companies, as identified by the IT system by single-point by April 30, 2011. The data of purchasers and sellers would be verified vis-à-vis list of suspected/suspended and blacklisted companies. With the help of IT system, the illegal tax adjustments obtained by fraudulent units would be immediately recovered which would also help in raising indirect taxes collection in March-June of current fiscal year.
Thirdly, the FBR has further issued instructions to the field formations to ensure maximum recovery of all stuck up arrears by June 15, 2011.
Fourthly, the FBR will also issue letters to Chief Secretaries requesting for co-operation of the Motor Registration officials with FBR''s withholding agent teams. The FBR teams would be deputed to enforce filing of returns from owners of new vehicles with the help of Provincial Motor Registration Authorities. The FBR will further request the Chief Secretaries to share all necessary data in cases where more than one vehicle has been booked with engine capacity of 1000 cc and above.
Sixthly, the FBR has further directed the FBR Member Legal to submit the exact position of cases where stay has been granted for more than six months period. This would also be used as a short-term revenue generation measure.
Seventhly, the FBR would enforce filing of sales tax returns from top 1000 non-filers companies and corporate entities by April 15, 2011. The FBR has also directed the LTUs/RTOs to ensure filing of sales tax returns from top 1,000 short-filers within the corporate sector by April 15, 2011.
Eight, the audit of withholding tax of all banks would be conducted and completed all over the country by April 15, 2011. The Director General of Broadening the Tax Base would ensure implementation of the decision. However, the FBR has given deadline of April 15, 2011 to the field formations for audit of withholding tax of all banks.
Nine, the FBR Member Inland Revenue will ensure compliance of the withholding tax on air tickets by three domestic airlines.
On the customs side, the FBR has directed the Valuation Committee constituted under the Customs Administration Reforms to submit its report by March 30, 2011. The Valuation Committee would ensure to submit its recommendations to apply proper values on imported items for accurate assessment of duties and taxes. The Tax Reform Co-ordination Group (TRCG) had constituted a Valuation Committee which would include, inter alia, FBR, Governor SBP, the Ministry of Commerce and stakeholders from the private sector to come up with measures to deal with misdeclaration and under-invoicing including availability of reliable valuation data. The TRC Group also decided that Chairman FBR would look into improving equipment support for preventing smuggling such as scanners, weighbridges and tracking systems as well as developing integrity and human capacity.
FBR Member Reformed General Sales Tax (RGST) Abrar Ahmed Khan would submit a report on the rationalisation of duties and taxes for controlling smuggling of items covered under the Afghan Transit Trade, the FBR enforcement plan added.