Post-refund audit of Rs93b to start

FBR convenes 4th Chief Commissioners Conference on July 23.

KARACHI:

The government has decided to conduct post-refund audit of Rs93 billion paid in refunds to taxpayers after it noticed “unusual rise in sales tax refunds” distributed through electronic system – casting doubts on the government’s claim of giving refunds without taking any bribery by its officials.

The Federal of Revenue has directed all the chief commissioners to conduct post-refund audit of January to July 2011 period in the first phase and complete it by July-end, sources told The Express Tribune on Monday. The government gave Rs93 billion in refunds during the outgoing fiscal year of which majority was disbursed in the second half of the year.

“At one regional tax office in Karachi during the sample audit FBR official Raza Baqir found that the payment of refunds under Expeditious Refund System increased more than two times and did not match with the exports statistics in Karachi region,” FBR Member Inland Revenue Service Khawar Khurshid Butt said. Major discrepancies were found in five zero-rated export sectors.

He said the FBR has convened the 4th Chief Commissioners Conference on July 23 in which along with many other issues the issue of refund management, Expeditious Refund System and post-refund audit will be discussed. He said bearing in mind the new fiscal year’s challenges the FBR has probably for the first time in its recent history called the Conference in July.

The FBR also directed Pakistan Revenue Authority Limited (PRAL) to provide relevant data to the authorities for moving ahead with post refund audit. “The ERS is good system but it requires consistent monitoring to avoid misuse so the Board has taken decision to conduct post refund audit to evaluate the entire system in great details,” said Butt.

Published in The Express Tribune, July 5^th, 2011.