The Federal Board of Revenue (FBR) is set to launch a comprehensive audit initiative targeting income and sales taxpayers, in a move to bolster its tax compliance efforts.
According to media resorts, the FBR has announced plans to conduct a series of audits, including desk audits, investigative audits, forensic audits, and field audits, in collaboration with third-party auditors.
The new audit strategy, introduced under the FBR’s Inland Revenue Transformation Plan, aims to enhance the quality and capacity of the FBR’s audit function.
In line with the plan, the FBR has hired external auditors and industry experts, detailing specific job descriptions, performance metrics, and review mechanisms for these auditors.
According to the FBR, the key performance indicators for auditors will focus on productivity (40%), audit quality (30%), and behavioral factors such as attention to detail, accountability, and discipline (30%).
Auditors will play a crucial role in assisting FBR officers with a range of tasks, including identifying non-compliance, discrepancies, and risk areas in tax filings.
The third-party auditors will support the FBR in analysing taxpayer declarations, reconciling data across various tax categories such as income tax, sales tax, federal excise, and customs, and identifying fraud or compliance issues. They will also examine financial records, including tax returns, financial statements, and accounting books, to ensure adherence to national and international standards such as the Companies Act, Income Tax Ordinance, and Sales Tax Act.
Additionally, the auditors will use financial ratios and industry benchmarks to identify discrepancies and potential tax fraud. They will assist in verifying expenses, examining tax credits and claims, and preparing reports on exemptions and tax reduction efforts.
The initiative aims to improve the overall audit process and increase tax revenue by ensuring better compliance across the country.
