ISLAMABAD: The Federal Board of Revenue of Pakistan generated tax demand of Rs14.5bn by conducting audit of selected 32,355 cases of influential individuals and giant companies. The massive audit exercise has so far earned the tax machinery Rs785m ($147.96m).
“We expect that the pending cases at different levels, including tribunals and courts, will be disposed off during the current fiscal year and Rs14.5 billion will be collected,” a senior official at the FBR said.
The holding of audit, the official said, has now become a permanent feature in the FBR as efforts are underway to promote tax compliance culture in the country.
Less than 0.8 million file tax returns in Pakistan - which is pathetic given the size of the country’s population, he said. The narrowed tax base should be broadened to meet the increasing fiscal requirements.
An official document revealed that the tax machinery had set August 15 as deadline for the field formations to accomplish the auditing of entire 41,727 selected cases.
The FBR has so far conducted the auditing of 78 percent cases whereby it generated tax demand of Rs14.560bn. In the case of audit, the creation of demand is not much important but placing deterrence is a crucial task, which will help tackling the tax evasion in Pakistan.
The tax revenue department conducted the last auditing over a decade ago. The FBR had started the audit exercise after the introduction of Universal Self Assessment Scheme during the rule of Musharraf. But, the auditing scheme was put on hold, resulting into massive tax evasion.
In view of the fiscal imbalances, the government has no option but to increase tax to gross domestic product ratio.
Although the FRB had selected 41,727 cases for audit for the tax year 2012, it could not conduct audit on 4,151 cases because of disputes on jurisdictions.
Internews
