ISLAMABAD, Aug 14: The Auditor General of Pakistan and the Federal Board of Revenue are at the loggerheads over auditing of cases relating to major tax frauds and access to the data of the tax machinery.
It is learnt that auditors tried their luck in the past few months to get access to record of tax frauds, but tax officials were reluctant to cooperate.
An official in the audit department told Dawn that as per rules (GFR 20), tax officials are supposed to report any loss or fraud to the audit department. However, this practice is not followed by the FBR in its full spirit.
Most of frauds were committed in payment of sales tax refunds, and release of containers at ports without receiving payment of duties and taxes.
In April 2012, the FBR and the audit department reached an understanding that the former would provide auditors access to data of FBR and Pakistan Revenue Automation (PRAL) for audit.
But after a lapse of four months, the official said the FBR was even still reluctant to provide access to data.
According to the official, another major issue of disagreement between FBR and audit department was the issue of non-production of record of sales tax and federal excise duty (FED).
The tax department was of the opinion that data of sales tax and FED cannot be provided for audit, while the audit department was asking for access and audit of such a data. The issue is yet to be resolved, the official added.
Similarly, the audit office was also denied access to the data maintained by PRAL for FBR.
Earlier, all necessary record was used to be made available for review and examination by audit teams.
Pursuant to a shift from physical to electronic system, data and e-filing of tax returns has been introduced by FBR.
Data is maintained by the FBR and its field offices in various formats.
The FBR is offering lame excuses to deny access to auditors. A tax official said that the FBR had no basic objection on provision of soft data. Only rules need to be crystallised for protection of such a data which is a properly structured and can be useful for a meaningful audit, the tax official added.
The audit department also demanded access to soft data in support of monthly cash accounts of FBR treasury offices.
The FBR, according to the official, was of the opinion that reporting of a case before its finalization by the relevant authority would be a futile exercise.
However, auditors are still urging FBR to share cases of fraud with them for audit purposes.
The auditors have also complained about failure of the department regarding due tax collection and its subsequent refund without supporting record.