recorder report

ISLAMABAD: The Finance Bill 2018 may amend section 214D (automatic selection for audit) of the Income Tax Ordinance 2001 to implement a comprehensive risk-based audit framework based on data matching principles.

It was learnt that the decision was taken during the last meeting of the

Tax Reform Implementation Committee (TRIC) held here at Federal Board of Revenue (FBR).

Sources told Business Recorder on Thursday that the TRIC reviewed measures for strengthening of tax audit functions. It was decided that the committee will be constituted under the chairmanship of the member (audit) and comprise members from IT, PRAL as well as field formations, which shall be mandated with designing a comprehensive risk-based audit framework based on data matching principles with the assistance of World Bank team. The proposed framework for selection of audit cases for the tax year 2018 shall be submitted to the FBR chairman for his approval. The TRIC shall also be apprised of progress made in this respect in the next meeting.

It was decided that the section 214D of the Ordinance will be revisited in the upcoming budget in view of the burgeoning pendency of audit cases due to automatic selection of late-filers for audit.

It was proposed that salary cases pending under section 214D of the Income Tax Ordinance depicting no accretion in assets during the relevant tax year may be dropped so that the pondency under section 214D is reduced to some extent. It was decided that this proposal shall be taken up in the next meeting of the Board-in-Council for necessary approval.