Taxpayers Audit

Preamble

The tax system in Pakistan operates on voluntary compliance/self - assessment basis, aiming to promote documentation and tax governance. Tax audits are an effective control tool used by the Federal Board of Revenue (FBR) to monitor taxpayer compliance. Audit in the current scenario is not to be viewed merely as a means to generate additional revenue; rather, to serve and identify high-risk taxpayers through a risk - based approach reflected in a CRM dashboard recently deployed in the field formations and to promote voluntary compliance..

Main responsibility of the Taxpayers' Audit Wing is to restructure and reform the audit policy. In collaboration with the Directorate-General (Compliance Risk Management), the Audit Wing works to identify risks through compliance risk management methodologies. These efforts aim to enhance the FBR's capacity to foster voluntary tax compliance through risk-based audits and to target non-compliant taxpayers, thereby strengthening the confidence of compliant taxpayers in the audit system.
Audit Policy / Cases Selected

Job Description of the Member (Taxpayers Audit)

1. Devise the Audit Policy for the relevant tax year with a concrete methodology for Income Tax, Sales Tax, and Federal Excise Duty:
   1. Design and apply a risk-based audit methodology for the selection of audit cases through balloting for Income Tax, Sales Tax, and Federal Excise Duty on an annual basis.
   2. Develop selection criteria to ensure coverage of all high-risk areas.
2. Implement the Audit Policy in field formations through strict supervision and conduct post-evaluation based on audit outcomes for cases selected under Section 214C of the Income Tax Ordinance, 2001; Section 72B of the Sales Tax Act, 1990; and Section 42B of the Federal Excise Act, 2005.
3. Monitor selection and disposal of audit cases otherwise than through Audit Policy, including:
   1. Cases selected by Commissioners under Section 177 of the Income Tax Ordinance, 2001; Section 25 of the Sales Tax Act, 1990; and Section 46 of the Federal Excise Act, 2005.
   2. Cases selected for desk audits under Income Tax, Sales Tax, and Federal Excise laws.
4. Monitor and ensure timely redressal of citizen complaints received through the Prime Minister’s Delivery Unit (PMDU).
5. Dispose of taxpayer representations related to audits under the relevant laws.
6. Coordinate with field formations regarding litigation on audit policy issues.
7. Perform any other duties assigned by the Chairman, FBR.