ISLAMABAD: Days after a provincial court set aside the tax audit policy on transparency concerns, the Federal Board of Revenue (FBR) approved a new policy for the selection of taxpayers for audit, which it insisted was compatible with the law.
The Audit Policy for 2017 pertaining to Tax Year 2016 has been approved by the FBR and the criteria for selection would be parametric, according to an official announcement by the FBR.
In March, the Lahore High Court had barred the federal government from enforcing the audit policy because of transparency concerns in the selection of cases. The court had ruled that the audit policy cannot be put into effect until the FBR framed risk parameters on the basis of which the selection of audit was to be made. The petitioner had pointed out that since no risk parameters had been provided by the FBR, it would give unbridled and unstructured powers to the officers.
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The new audit policy is compatible with the law and has been prepared while keeping in mind the court’s directives, said Dr Mohammad Iqbal, the FBR spokesman. He said that except in the case of income tax, the risk parameters for selection of audit cases of sales tax and federal excise duty have been revealed by the FBR.
Dr Iqbal said that the Income Tax Ordinance bars the disclosure of the risk parameters, therefore, the FBR will keep them confidential.
