Taxpayers filing returns to come under audit from this fiscal

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Doulot Akter Mala
Taxpayers who file tax returns under universal self-assessment system will come under audit from this fiscal as the National Board of Revenue (NBR) has scrapped the income tax rules that offered an exemption upon fulfilling some criteria.
The board has scrapped the rules in the current fiscal year (FY 2012-13) after it found that the taxpayers are evading tax under the facility.
Earlier, an individual or corporate taxpayer enjoyed exemption from audit by showing a 20 per cent increase in his/her annual income compared to that of the previous year.
"We have identified that some taxpayers have earned double profit in a year but shown only a 20 per cent increase in income under universal self-assessment method," said a senior income tax official.
Taxmen have nothing to do except watching the concealment of income because of the rule, he added.
"We have scrapped proviso sub-rule-3 of section 82BB to bring the universal self-assessment tax files under audit with the approval of the board," he said.
From now on, taxmen can audit any of the tax files with the approval of NBR without any barriers.
The NBR introduced the universal self-assessment system in FY 2007-08 with an aim to encourage voluntary payment of tax without any fear.
Taxpayers who filed income tax returns under the system enjoyed exemption from audit. NBR conducted audit of less than 1.0 per cent of these types of tax files following some specific criteria.
Since the introduction of the system, it became popular to taxpayers. Some 90 per cent of the taxpayers migrated to this system from general and self-assessment ones.
Former income tax member Aminur Rahman said the government should continue the exemption for taxpayers under the system as it is an incentive for taxpayers.
"There is no alternative to encouraging voluntary tax compliance," he said.
Scrutiny of tax files cannot bring any substantial amount of tax, he added.
Many people evade tax in our country and taxmen can bring them under net by offering such incentives, he said.
There were seven specified criteria for auditing files of individual taxpayers submitted under the universal self-assessment system. These are: showing illogical losses in business despite having record income previously, abnormal decline in income compared to that of the previous year, no logical explanation on increase of wealth, unacceptable tax-exempted income, unacceptable donation, non-institutional loan without any evidence and legal loopholes.
In case of any company taxpayer, the criteria are: abnormal expenditure in a specific sector, showing illogical loss or refund in addition to those set for individual taxpayers.