Sketchy IT return forms: filers must be served notices: USAID advisors

The Tax Administration Advisors of the United States Agency for International Development (USAID) have recommended to the Federal Board of Revenue (FBR) that the tax department must serve notices to the filers of incomplete income tax return form October 1, 2011.
Sources told Business Recorder here on Saturday that the issue of taxpayer's audit and compliance by the return filers was discussed during a meeting between the Competitiveness Support Fund (CSF) Advisors and the FBR team headed by FBR Chairman Salman Siddique.
During the meeting, Abdullah Yousaf, Head of the USAID/CSF Tax Assistance Project Team suggested that for risk based audit, a sectoral analysis must be conducted taking into consideration the current Gross Profit (G.P) rate, net profit rate etc and analyse it electronically. Once a case is found to be out of the range, the same may be identified.
Habib Fakhruddin, CSF Advisor, pointed out that the present return forms are deficient and will not be able to provide the information necessary to run the criteria electronically. Audit parameters and return forms have to go side by side. Therefore, required changes be made in the return form.
It has been decided that the return form would be modified by incorporating changes required for risk based audit selection. Secondly, by October 1, 2011 notices for incomplete return must be sent. The timely issuance of notices would ensure collection of necessary data by the filers of returns, who would submit incomplete information in their returns, sources added.
Tax Administration Advisors further proposed that the Audit Parameter should be run on 2010 returns for selection of cases for audit. It has been further decided that for revenue forecasting, reduction of tax gaps, monitoring of revenue collection and exploring new avenues for enhanced revenue, a number of workshops will be conducted, sources added.