NBR guidelines to avoid taxpayers\\\' harassment

The National Board of Revenue (NBR) has issued guidelines on selection of tax files for auditing to save taxpayers from harassment by the tax-survey offices.
Officials said the step came after it was found out that some taxpayers' files were audited almost every year, leading to their unnecessary harassment.
The tax-survey offices will now have to go by the guidelines in the selection of tax files for auditing to avoid taxpayers unnecessary repetition of auditing.     
The board found that some taxpayers faced audit either in the tax year 2011-12 or 2012-13, or in both the years, and the survey offices again sent their names to the NBR for its approval for 2013-14.
There must be adequate and valid reasons for selecting the taxpayers' files for auditing in two or three consecutive years, the sources said.
Under the guidelines, taxmen will have to explain the reasons to the taxpayers for selecting their tax files for audit.
They will seek explanation from the taxpayers. In case of failure in receiving any satisfactory explanation, the taxmen would take recourse to legal steps. Tax commissioner and relevant audit manager would supervise the audit activity.
According to the new rules, the taxmen will have to proceed with the issue or reason for which they have selected the tax files. If other evidence of tax evasion is detected in that process, the tax official concerned can take legal steps with the permission of tax commissioners and audit managers.
The tax inspection and audit wing issued the guidelines recently to the central tax-survey zone following the selection of some tax files for auditing in consecutive years without specifying sufficient reasons.
The tax authority has found the trend in some of the income-tax-survey offices across the country by examining the lists of taxpayers selected for audit and sent to the NBR for approval for reasons not known.
With the guidelines, the NBR has sent back names of 15 of such taxpayers and sought detailed explanation for selecting their tax files frequently.
The NBR has instructed the field-level tax officials not to spend more that three to four days on auditing tax-related files.
"The process of tax adjustment should be completed within 90 days of audit. Tax commissioner would continue to supervise until realisation of the additional tax that the taxmen have identified through auditing of files," says the new direction.
Eleven survey circles located in Dhaka, Chittagong, Rajshahi and Khulna have sent lists of some 500 taxpayers -- both corporate and individual--for auditing for the tax year 2013-14.  Of them, 475 cases got approval of the board.
A senior tax official said the NBR needs to know the logic for selecting the tax files every year, its revenue implications and comparative study of the audit activity.
He said the revenue board has already instructed the field offices to avoid frequent auditing of tax files to comply with the instruction from the finance minister given on June 5 from parliament.
In his budget speech, Finance Minister AMA Muhith said taxpayers should not face audit more than once every three years.
The tax official said it is difficult to frame a universal rule on tax file auditing.
"The NBR has asked the taxmen not to select the same tax file every year unless in exceptional cases or major irregularities are found," he said.
The tax-audit wing of the NBR would visit the field-level tax offices to monitor compliance with its instructions.
 As per instructions, tax offices will have to display names of the taxpayers selected for audit on the notice boards of the respective tax circles.
Field offices have to report the development of audit activity in the first week of every month.
Tax officials said the field offices select less than 2.0 per cent of the total tax files that taxpayers submit under the universal self-assessment system.
However, they acknowledged harassment in the name of auditing in some tax offices. Although all of the tax files do not face audit, many face threats of audit that force taxpayers to bribe them, sources said.
  

 [email protected]