TaxPayer

Taxes

ERS to conduct post-refund audit of 5-10 percent claimants: FBR informs World Bank mission

ISLAMABAD: The Federal Board of Revenue (FBR) has conveyed to the World Bank (WB) that the Expeditious Refund System (ERS) would conduct post-refund audit of 5-10 percent of total claimants, based on risk-based parameters. Sources told Business Recorder here on Monday that the FBR has submitted a report to the WB review mission on the progress on the ERS.

The Board has informed the WB that the FBR will not conduct post-refund audit of all ERS refunds. Only a small proportion of cases (5-10 percent) will be post-audited, which will be selected on the basis of risk analysis. Thus, 5-10 percent of the refund claimants would go through the verification of process of post-refund audit.

Withdrawal of SROs-based zero-ratings: FBR's biggest challenge

ISLAMABAD: The Federal Board of Revenue (FBR) is facing the big-gest challenge of withdrawing statutory regulatory orders (SROs)-based sales tax zero-rating covering a wide range of items including plant machinery, equipment and scrap. An analysis of the SROs, issued by the FBR from time to time, showed that sales tax zero-rating facility has been available to a large number of products through SROs/notifications.

Sources told Business Recorder here on Friday that SROs have been extensively used to grant sales tax zero-rating on different items. A review of SROs showed that different kinds of goods had been extended sales tax zero-rating through notifications of FBR. SRO-based sales tax zero-rating is available on export of goods ex-empted under section 13 of the Sales Tax Act, 1990; cotton seeds and oilcake and other residues.

Wrong interpretation of tax laws: ADRCs cause huge loss to exchequer

ISLAMABAD: The Alternative Dispute Resolution Committees (ADRCs) of the Federal Board of Revenue (FBR) have caused huge revenue loss to the national exchequer by wrongly interpreting tax laws for giving inadmissible benefits to the taxpayers.

A special study of the Auditor General of Pakistan on evaluation of performance of ADRCs revealed that the ADRCs of the FBR have given financial benefits to many companies by wrong interpreta-tion of tax law.

The AG office report also showed that the FBR Legal Wing has to-tally failed to check wrongly processed cases under the ADRCs. There are instances where ADRC recommendations were accepted by the FBR in criminal cases where FIRs have been lodged against persons involved in tax frauds. The report reflected that the forum of the ADRCs has been misused through wrong interpretation of tax laws.

End tax exemption to broaden base: experts

LAHORE: To broaden the tax base, there is a need to end exemp-tion of tax on various sectors and bring them into the tax net.

The government should also bring into the net the people and groups who are evading taxes due to their connections in the power echelons. These views were expressed by the participants in a discussion on ‘How to increase revenue generation?’ held by the Jang Economic Session and organised by Sikandar Lodhi and Intikhab Tariq.

LTUs, RTOs critical of flaws in tax system

ISLAMABAD: Officials at Large Taxpayer Units and Regional Tax Of-fices are not satisfied with the implementation of the Federal Board of Revenue tax systems including Centralised Mahasil, Ex-peditious Refund System, STMS+, Audit Workflow, Tax Accounting and STARR, as overlapping of data creates confusion in exactly lo-cating the glaring mistakes.

A thorough investigation of internal systems by FBR revealed that the end-users in the field formations were generally sceptical about the implementation methodology of these systems. All these systems play key role in verification of data particularly in issuance of refunds, audit and maintenance of data on income tax returns. It was observed that systems, being developed were either in isolation or involved insignificant input from the business domain, lacked effective implementation; whereas the systems evolved by the business domain had considerable acceptance in the field formations as far as implementation is concerned.