The Federal Board of Revenue (FBR) is seeking powers under the Finance Bill 2019 to conduct audit of income tax affairs of banks, examine their accounts/ records and conduct inquiry into their expenditure, income, assets and liabilities. This has been stated by a senior FBR official while briefing the Senate Standing Committee on Finance here at the Parliament House on Thursday. FBR Member Inland Revenue (Policy) Dr Hamid Ateeq Sarwar informed the committee that the FBR is empowered to conduct audit of banks. A few banks went into litigation that the FBR cannot audit their income tax affairs, as banks are covered under a special schedule of the Income Tax ordinance 2001.

To deal with the issue an "explanation" has been added to the Income Tax Ordinance 2001. Referring to the explanation, FBR Member Inland Revenue (Policy) said that it is clarified that nothing contained in this Schedule shall be so construed as to restrict power of Commissioner, while conducting audit of the income tax affairs under section 177, to call for record or such other information and documents as he may deem appropriate in order to examine accounts and records to conduct enquiry into expenditure, income, assets and liabilities of a banking company and all provisions of this Ordinance shall be applicable accordingly, he added.

To a query, Dr Hamid Ateeq said that the agriculture is a provincial subject. However, the FBR can collect agricultural income tax on behalf of the provinces provided the provinces authorise the FBR to collect the tax.

Copyright Business Recorder, 2019