PTBA criticizes third-party audit of taxpayers

PTBA criticizes third-party audit of taxpayers

Pakistan Tax Bar Association (PTBA) has expressed concerns over decisions of the authorities to conduct audit of taxpayers through external auditors.

In a statement, the apex tax bar of the country, expressed concerns over the decision taken by the Federal Board of Revenue (FBR) regarding the assignment of cases of Income Tax, Sales Tax and Federal Excise Duty to the third-party auditors for conducting audit of the taxpayers’ affairs.

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The PTBA said that the cases of those taxpayers were selected for audit, who had filed the returns of income tax and sales tax voluntarily. “Conducting third party audit of such taxpayers will result to open doors of corruption.”

Additional cost of which will have to be borne by the taxpayers, who are already on tax role and paying their taxes voluntarily.

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PTBA President Rana Munir Hussain in the statement said: “It will also increase the cost of doing business, which will lead to increase in inflation.”

The FBR decision will also give a negative message to the general public that either the field formation of the FBR is not trustworthy or incompetent. “The FBR should also take lesson from its past decision/experience when the same idea was failed badly.”

The decision for referring the audit to third parties will also be conflict of interest as most of the audit firms appearing on the panel of the FBR are also engaged in tax practice.

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“The FBR instead squeezing the taxpayers, who are already on the tax role, should focus on the recovery of due tax from 25 million persons who admittedly are earning millions of rupees but contributing nothing to national exchequer.”

Further, the PTBA said that there was not need to promulgate the Finance Supplementary Act, 2022. “It will adversely affect the financial position of general public and increase the cost of living of common men, those are already suffering due to the pandemic and will further increase the inflation in the country.”

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