Business community points out flaws in Audit Policy 2016

Discusses issues including budget proposals, sales tax and income tax registration

LAHORE: The Audit Policy 2016 of the Federal Board of Revenue (FBR) has flaws that must be removed to address the reservations of the business community. This was stated at a meeting of the Lahore Chamber of Commerce and Industry (LCCI) Standing Committee on Finance, Taxation and Sales Tax.

Various issues including budget proposals, sales tax and income tax registration, establishing a help desk and complicated taxation system were discussed at the meeting.

Speaking on the occasion, LCCI Vice President Muhammad Nasir said that the lack of consultation on policy matters is one of the biggest reasons for the lack of trust between businessmen and the government.

He said that the FBR could attract more tax returns through policy reforms, further adding that the philosophy of considering fines and penalties as revenue measure is not logical and should be reconsidered.

Standing Committee on Finance, Taxation and Sales Tax Convener Tanvir Ahmad Sufi said that FBR would have to satisfy business community on the Audit Policy 2016, which was announced without any consultation.

He suggested that conducting an audit of salaried persons having no other source of income should be excluded as tax is withheld and deposited by the employer. He said that the cases of Final Tax Regime should be excluded from audit eg dividend income, bank interest and rental income etc.

Sufi said that such incomes, which are exempt from tax, like foreign remittances and agricultural income should not be audited.

Share of partners in case of Association of Persons (AOP)/Partnership Firm where there is no any other income of partner should also be an exclusion from audit, he said, further adding that businesses whose audit has been carried out in last three years should not be considered for audit.

The committee also decided to invite all the chief commissioners one by one to take up important matters of the business community.

They urged the FBR to establish a help desk at LCCI for sales tax registration, income tax registration and change of particulars etc.

They said that local investors should be encouraged in China-Pakistan Economic Corridor Project and a well-balanced Federal Industrial Policy should be formulated in this regard. 

Published in The Express Tribune, January 24^th, 2017.

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