The National Board of Revenue (NBR) has indefinitely suspended all tax audit activities for individual taxpayers due to alleged complications in the current audit selection guidelines.
The decision was outlined in an office order signed by Md Alamgir Hossain, member of Tax Audit, Intelligence and Investigation wing of the revenue board on Monday.
The directive halts the selection of new audit files and submission of audit lists for approval until further notice. NBR officials claim that the existing process is too complex and costly, with revised guidelines expected to be issued soon to streamline procedures, hence the halt.
According to the office order, no circle office under any tax zone will select any return file of natural person (individual taxpayer) for new audits and will also send any audit case list to the board for approval until a following notification is served.
“NBR will provide the next direction to its field level very soon in this regard,” the order added.
Concurrently, the manual audit selection process has not only increased complexity but also led to greater harassment of taxpayers, prompting field officials to repeatedly call for its cancellation, tax authorities revealed.
In response, the NBR is developing a digitised audit selection system, which will automate the nomination of tax return files for audit. This new system is expected to reduce taxpayer hassle, streamline the process, and enhance transparency, ensuring a fairer and more efficient audit selection.
"The NBR has launched a digitised audit selection system for individual taxpayers as a pilot project," a senior official from the revenue board revealed, requesting anonymity. "If successful, it will be made mandatory for all taxpayers, including corporations and firms."
"Developing this online system may take up to a year," the official further added.
Under the current audit guidelines, taxpayers must show a 15 per cent increase in income from specific sources reported in their previous fiscal year’s tax returns to be exempt from an audit.
This undue threshold ensures that only those with significant changes in their financial declarations are subject to additional scrutiny, streamlining the process for consistent filers while still maintaining unreasonable oversight.
