SOHAIL SARFRAZ

ISLAMABAD: Following selection of 93,277 cases for audit through computerised balloting, Finance Minister Ishaq Dar said Thursday that some 'way out' could be provided to those who wanted to come into tax net after witnessing developments on OECD's anti-tax evasion agreement at international level and making global asset registry mandatory through fresh companies ordinance in Pakistan.

He was addressing a function arranged by the Federal Board of Revenue (FBR) to select parameter and risk-based audit through computerised balloting at the FBR House here on Thursday.

Parametric computer ballot was carried out as per Audit Policy 2016 for selection of cases for audit for Tax Year 2015 and Tax period July 1, 2014 to June 30, 2015, in respect of Income Tax, Sales Tax & FED. Ishaq Dar pushed the button to select the cases for corporate sector of income tax.

Out of total 93,277 cases, the FBR has selected 2,173 cases for audit from corporate sector income tax, 82,090 cases from non-corporate sector of income tax, 987 cases from Sales Tax (corporate), 7,976 from Sales Tax (non-corporate), 30 cases from Federal Excise Duty (corporate) and 21 cases from FED (non-corporate).

National Tax Numbers (NTNs) of cases selected for audit have been displayed on the official website of FBR.

Dar dispelled the impression that the revenue has been increased through imposition of new taxes, saying, "No new taxes have been imposed but tax net has been widened."

He said in 2018, the energy crisis will not only come to an end but the electricity will be available in surplus.

While addressing the ceremony for selection of audit, Ishaq Dar said that the FBR has selected 7.5 per cent cases for holding audit out of total received returns under Universal Self Assessment Scheme (USAS).

Dar said that all those who are honest should not worry about it if their names were included into the list of selected audit cases. He said that he had faced such things in life but came out with clean hands.

Without mentioning anyone's name, the minister said that the jet plane was declared on company's name but it was being used for political purposes.

The minister said that he was the one who dared present summaries before the cabinet for signing Organisation for Economic Cooperation and Development (OECD) agreement on anti-tax evasion for exchange of information and for initiating agreement with Swiss authorities on bilateral level. "We have refused to grant extraordinary concessions to Swiss authorities and now they have invited us to initiate talks on exchange of information," he maintained.

He cited examples of the US and UK and said that one rich woman was selected for audit and put behind the bar for three years because she had declared one painting on her company's name but had hung it at her own house.

He said that Swiss authorities had demanded reduction in taxes and MFN status in their favour but they did not succumb to the pressure. He said that the SECP issued notices to 42,000 companies related to global asset registry after promulgation of fresh companies' ordinance that was replaced after 34 years. He said that one should pay his due taxes as the FBR achieved 60 per cent revenue in last three years as it was used to achieve growth of just 3.3 per cent before 2013.

Special Assistant to PM on Revenues Haroon Akhtar Khan said that it was lifeline for USAS to hold audit in effective manner as it could jeopardise the whole system if the audit remained ineffective. He said that unfortunately the audit was challenged into courts so now they decided to hold parameters and risk-based audit after getting guidelines from the judiciary. "We have excluded 65 per cent returns from the audit as only those sectors were included which possessed high risks," he added.

In UK, the IR authorities could check restaurants so deterrence is needed to be put in place to make USAS successful in Pakistan, he said.

Haroon Akhtar emphasised the importance of audit in a country like Pakistan where universal self assessment scheme is prevalent. He ensured that the tax audit shall be conducted in a professional and transparent manner.

FBR Chairman Nisar Muhammad Khan apprised of the paradigm shift in selection of cases for audit. Earlier, it was random ballot but for the Tax Year 2015, the selection is based on risk parameters. Resultantly compliant taxpayers will not be selected.

Later on, computer ballot was conducted in respect of SIX categories i.e. corporate cases of Income Tax, Sales Tax & FED & Non-corporate case of Income Tax, Sales Tax and FED.

The ceremony was attended by representatives of Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Institute of Chartered Accountant of Pakistan (ICAP), Pakistan Tax Bars Association (PTBA), Pakistan Tax Advisors Association (PTAA), Islamabad Women Chamber of Commerce and Industry, and FBR officers.

Ishaq Dar initiated the ballot process by pressing computer button for Income Tax (Corporate), Haroon Akhtar Khan pressed button for Income Tax (Non-Corporate), Vice President of FPCCI Mian Shaukat Masood pressed the button for Sales Tax (Corporate) and Mian Abdul Ghaffar, Advocate President of Pakistan Tax Advisors Association, pressed the button for Sales Tax (Non-Corporate). Further Selection of cases for Federal Excise (Corporate) was made by Mohsin Nadeem, President Pakistan Tax Bar Associations, and Samina Fazal, representative of Islamabad Women Chamber of Commerce & Industry, completed the process by pressing the button for Federal Excise (Non-Corporate).