Sources told Business Recorder on Sunday that the Board has formulated the draft of company's 'Statutory Auditor's Report' to improve revenue collection from withholding tax agents, and to monitor income tax deduction at source under the Income Tax Ordinance 2001.
The draft amendments in 'auditors report' have been finalised, taking into account the viewpoint of the Securities and Exchange Commission of Pakistan (SECP). In this regard, CBR has also approached the Institute of Chartered Accountants of Pakistan (ICAP).
Recently, CBR officials met the SECP Chairman to discuss the 'Companies Ordinance' for incorporating the proposed amendment to verify taxes deduction. Out of three proposed amendments, one of the proposals would be incorporated in the Companies Ordinance, keeping in view the observations of stakeholders.
Currently, company auditors verify that Zakat, to be deducted at source under the Zakat and Ushr Ordinance 1980, was deducted by the company and deposited in the Central Zakat Fund. Similarly, if the auditors were required to express their opinion on tax deducted at source and deposit the same in the government treasury, it would improve accuracy and speedy collection of withholding tax. The amendment would also improve compliance level of the companies.
The CBR has issued instructions to Members and ICAP to submit their viewpoints on the draft of proposed amendments.
One of the following amendments (depending on the consent of ICAP and SECP) may be made to monitor tax collection more effectively.
THE CBR HAS PREPARED THE FOLLOWING DRAFT OF 'STATUTORY AUDITOR'S REPORT':
1. In our opinion, income tax deductible at source has been deducted and deposited in the treasury, as required under the Income Tax Ordinance, 2001.
2. In our opinion, all federal taxes, which the company is required to collect or deduct under various statutes and regulations applicable to the company, have been collected, or deducted, and have been deposited in the treasury.
3. We conducted our audit in accordance with the auditing standards as applicable in Pakistan.
These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by the management, as well as, evaluating the overall presentation of the above statements. Our audit also includes an evaluation of entity's compliance with applicable laws and regulations. We believe that our audit provides a reasonable basis for our opinion.