ISLAMABAD: The Federal Board of Revenue (FBR) has decided to give tough time to an unregistered person in the new audit policy 2017.
The tax department on Tuesday issued the communique indicating that the board has approved the audit Policy for 2017 pertaining to Tax Year 2016.
“To facilitate the taxpayers, case of a taxpayer once selected for audit through ballot shall not be selected for audit for next (consecutive) two tax years under section 214C of the Income Tax Ordinance 2001, under section 72B of the Sales Tax Act 1990 and 42B of the Federal Excise Act 2005 respectively”, Moreover, the board shall keep the parameters confidential under the new audit policy.
The FBR will conduct computer ballot on the parametric basis for selection of 7.5 per cent cases for audit out of the total filers after exclusions in Income Tax, Sales Tax and FED returns filed for Tax Year 2016 and Tax Periods, for instance, July 2015 to June 2016.
All cases already selected for audit by the Commissioners Inland Revenue, the Director I&I (IR), Under section 214D of the Income Tax as well as u/s 214C for Tax Year 2015, the cases of Income from salary where the salary exceeds 50 per cent of taxable income except cases having business income, cases under Voluntary Tax Compliance Scheme (VTCS) for traders and cases falling under the Final Tax Regime (FTR) will be excluded from balloting.
In addition to this, 8 risk parameters have been determined by the board for selection of cases for audit under Sales Tax and Federal Excise respectively. The parameters which decline in value of supplies, is greater than 10 per cent over last year; consistent decrease in output tax/input tax ratio over last three years; decrease in ratio of taxable supplies to total supplies by 10 per cent or more as compared to previous year; Nnn-filer, nil-filer or null-filer for more than 6 months in the year in case the registered person is showing any turnover in income tax return of the corresponding period and Manufacturers showing value addition of less than 10 per cent.
Furthermore, where more than 30 per cent purchases, as well as sales, are from “unregistered persons” and increase in carrying forward of input tax and reduction in sales by a margin of 10 per cent is also in the parameters in sales tax audit.
