Taxmen will scrutinise revenue risk-factors involving the highest taxpayers, both corporate and individual, on the basis of their disclosed income, net assets, turnover and paid taxes in the selection of tax-files for audit.
Under the field-audit policy 2014-15, the National Board of Revenue (NBR) recently instructed taxmen to ascertain the risk-factors, as it found that a negligible number of those taxpayers faced audit in the last three years.
The income tax wing of the NBR recently sent the policy to the tax-offices across the country after a meeting with the income tax commissioners last month.
The policy has incorporated separate sample work-sheets to help the taxmen find out the 'revenue risk-factors.'
Major risk-factors for corporate taxpayers include personal loan above Tk 0.5 million (5 lakh), tax-rebate claim, loss in business, tax-exempted income, inconsistencies in shown income in financial audit reports and income tax returns, abnormal increase or decrease in import, export, purchase, depreciation, bank balance, gross-profit rates and net profit compared to the figures for the previous corresponding year.
For individual taxpayers, the field-audit policy instructed taxmen to monitor transfer of fund to another tax year, satisfactory explanation on increase of net assets, bank reconciliation statement, inconsistencies in household income from rents, both residential and commercial, on the basis of area, past records etc.
The 'field-audit policy' has set out detailed rules for the tax-offices on formation of an audit team, working method of the team, selection of tax-files filed under the universal self-assessment system.
For large and multinational companies, the policy directed taxmen to monitor inconsistencies in import-export data, trading accounts, inclusion of immovable properties and depreciation, quantitative analysis of manufacturing accounts, bank account information etc.
Specialised and medium-scale industrial units can be audited considering their revenue implications, the policy says.
Taxpayers escaping audit for long, showing operating business loss without valid documents, having less income from house rent or no agreement with tenants and declaring less family expenditure compared to the living standard of the taxpayer will be considered as key points, based on which any tax-file will be audited.  Â
In a bid to quicken the disposal of tax-files, the policy has allowed taxmen to seek NBR audit approval in phases.
Considering revenue implications, the field-offices will send 20 tax-files at a time in a batch and the others in next phases after 30 days.
Talking to the FE, a senior tax official said giving audit approval for a large number of tax-files after review of the justification of their selection by the tax-offices for audit is a time-consuming task.
"Earlier, tax offices used to send the lists of taxpayers at a time within a specific timeframe. Such hurriedly selected tax-files may cause injustice to genuine taxpayers," he said.
For the fiscal year (FY) 2013-14, the NBR has allowed the taxmen to audit files of about 31,000 taxpayers.
The income tax wing has already instructed the tax-offices across the country to send the first batch of the selected tax-files for the FY 2014-15 by March 1 next. Â
However, the tax offices can seek approval for audit throughout the year.
The policy has framed a common guideline for exclusion of tax-payers from audit. The exemption covers those who have shown 20 per cent higher income in the tax-files than that of the previous year. But, they have to follow six conditions.
However, taxpayers will not be entitled to the facility in case of not filing tax-returns in the previous corresponding year.
To avail the benefit, a taxpayer must have valid documents on tax-exempted income with the tax-return and the bank statement on any personal loan above Tk 0.5 million (5 lakh).
Tax-files under the universal self-assessment method can be audited, if taxpayers show gift or donation, income from sources enjoying reduced tax rates or claim tax-rebates.
Taxpayers, who faced audit in three consecutive years, can come under the audit in the current FY, if he fails to comply with the conditions.
Tax officials will have to specify the legal and factual errors in the tax-files that they selected for audit. They can avoid selection of the tax files on the basis of anticipation.
The policy, however, suggests that the taxmen can exclude any taxpayer having an income only from salary from the audit, if there is no serious inconsistency in income, assets or liabilities.
   doulot_akter@yahoo.com
Policy to select tax files for audit
Doulot Akter Mala | Published: February 09, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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