Federal Board of Revenue (FBR) has agreed to settle audit cases by accepting up to 25 percent additional tax against the corresponding fiscal from taxpayers, said sources. According to the sources, verbal instructions have been extended to the regional tax authorities with a direction to speed up the settlement. Sources said the prime objective of the exercise was to add more to the revenue before the closing of current fiscal year, which was already registering a shortfall of about Rs 100 billion.

It may be noted a similar practice was made in 2003 despite the fact that no statutory provision is available to this effect. Reliable sources said the proposal was put forward to the Chairman FBR last week, which was opposed by the regional heads initially. However, a detailed negotiation resulted into a consensus and both sides agreed settle down the issue amicably.

Sources said a protest was also lodged in front of the Chairman FBR for reselection of taxpayers for audit this fiscal year as well. They said it had discouraged a number of taxpayers, particularly the commercial ones, who are planning not to expand their businesses any further. But the Chairman FBR made it clear to the participants that selection of income tax returns for audit was a computerised process and no manual intervention was possible in this regard.

It was also informed to the meeting that total number of audit cases in the Lahore region was around 8,000. The FBR officials further admitted that audit of such a huge number was also beyond capacity of the FBR, especially due to the late filing of returns by the taxpayers. Chairman FBR informed the participants that he was in the process of formulating the audit policy that would be in place during the next fiscal year and to be applied from the financial year 2018-19.

Copyright Business Recorder, 2017