The National Board of Revenue (NBR) on Monday asked taxmen not to select tax return afresh for auditing, finding the existing audit system faulty that causes unusual harassment to taxpayers.
Use of discretionary power of the taxmen has been allowed to a great extent in the current audit guidelines which taxpayers often alleged as injustice to them.
In a letter, Md Alamgir Hossain, member of taxes (tax audit, intelligence and investigation) asked all field-level tax offices not to select new files for auditing until the next order issued.
However, the tax returns already selected for audit would go through auditing in the normal process.
Talking to the FE, Mr Hossain said the NBR has suspended the new selection of tax files for auditing following complexities faced by both field-level tax officials and taxpayers.
"We have a plan to stop the manual auditing system. We will introduce a digital audit selection system to give relief to taxpayers," he added.
For the interim period, until the digital system was introduced, the NBR would set some specific criteria for selection of audit file, he added.
However, no tax offices would be able to select tax files for auditing until issues of an order setting the parameters for auditing, he said.
The parameters such as if a taxpayer shows a significant amount of loss in a tax year, or claimed a large amount of tax rebate might be explored for audit selection.
After the Income Tax Act 2023 was implemented, the NBR has issued audit guidelines which have created complexities on selection of tax files for audit.
Taxpayers also feared harassment if taxmen select their tax files as per audit guidelines.
Under the new guidelines, taxpayers would have to face interrogations in several stages which may create scope of underhand dealings and increase associated costs on tax return submission.
Also, the Deputy Commissioner of Taxes (DCTs) concerned would not be able to be involved in the audit process with basic information of the tax files and its history of tax evasion or compliances.
Economist and public policy expert Dr Masrur Reaz has hailed the move by the NBR recommending a risk-based automated system adopting technology.
The auditing parameters have to be specific and clear to scrutinize tax files, he added.
Khandaker Khurshid Kamal, former commissioner of taxes, said until the NBR introduces automated random tax file selection system, not by person, the tax files audit should be suspended.
Once all taxpayers' data would be preserved in the core system, auditing of tax files would not be difficult by an audit team of other tax zones, he added.
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