Taxpayers Audit
Preamble
Tax system in Pakistan is operating on self-assessment basis aimed at promoting voluntary-compliance, documentation and self-policing. Tax Audit is an effective instrument of control with the FBR through which compliance level is monitored. Audit can play a major role in improving overall Tax compliance. It should not be seen as a tool to generate additional revenues. Rather it is a tool to identify the high risk taxpayers through risk based approach and promote voluntary compliance. Moreover, audit is a tool to address the tax law deficiencies and act as risk based responsive regulation. To strengthen function of audit, FBR has established a central risk based and automated “Risk Based Audit Management System (RAMS)” as per international best practices. The purpose of RAMS is to select non-compliant taxpayers on scientific matrix Risk Grid which segregates the potential and high-risk cases for audit through parametric computer balloting.
In order to achieve the aforementioned goals, Taxpayers Audit Wing was established in January 2003 and merged with Accounting Wing as Audit & Accounting Wing with effect from 01-01-2021. It was later de-merged from Accounting Wing and amalgamated with Directorate-General (Compliance Risk Management) with effect from 27.08.2023. The main task of Audit Wing is restructuring and reforming the audit policy. Audit Wing in collaboration with Directorate-General (Compliance Risk Management) endeavors for identification of risks through Compliance Risk Management methodologies which will further build the capacity of FBR to foster the voluntary tax compliance through risk based audits and to focus on non-compliant taxpayers thus building the confidence of compliant taxpayers in the Audit system.
JOB DESCRIPTION OF TAXPAYERS AUDIT
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Planning and designing audit procedures.
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Evaluating tax audits for all domestic taxes.
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Devise and implement a National Audit Plan.
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Design selection criteria for coverage of all higher risk areas.
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Develop audit methodology to ensure audit quality.
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Audit and Monitoring of Unlawful Sales Tax input adjustment.
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Monitoring Post Refund Audit of Income Tax, Sales Tax and FED.
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Desk Audit and resultant legal actions.
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Any other duties assigned by Chairman FBR.
AUDIT PROCESS SHOULD BE EFFECTIVE, FAIR AND CONDUCTED WITH INTEGRITY
FBR is taking great care to ensure that audits are conducted in courteous, efficient, professional and effective manner as well as with highest standards of integrity.
Selection Criteria
Taxpayers are selected for audit on the basis of transparent, discretion free and automated process. The selection is done by computer, using different information items and parameters, without resorting to any identity details of the taxpayers.
Ensuring Integrity and Quality
An overall Integrity Program has been implemented within the organization. Auditors and Managers are expected to meet the highest ethical standards. Disciplinary actions will be initiated against those who choose to conduct themselves in an unethical manner. A quality review process has been established to ensure that prescribed standards and procedures are followed and there is uniformity in application of laws and procedures.
Taxpayers Feedback
Periodic feedback from Field Formations and Tax Bars Associations is obtained to:
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Gauge perception of the Audit Process.
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Improve the overall audit process.
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Evaluate the behavior, professionalism and competence of Audit staff.
