The Financial Express

IRD moves to audit maximum 25,000 income tax files to detect evasion

Allegations of harassment by field-level staff

| Updated: October 23, 2017 15:20:50

Evaly and Fianancial Express Evaly and Fianancial Express
Used only for representation purpose, this photo shows the National Board of Revenue office at Segunbagicha in Dhaka city. Used only for representation purpose, this photo shows the National Board of Revenue office at Segunbagicha in Dhaka city.

The Internal Resources Division (IRD) has issued a directive to audit maximum 25,000 income tax files of both individuals and corporate taxpayers to detect tax evasion and concealment of actual income, officials said.

The income tax authority has received the directive from the IRD not to exceed this number of tax files that were submitted in tax year 2016-17.

The IRD asked for selection of tax returns for audit on the basis of volume, for the first time, instead of regular practice of percentage of the total tax returns to avoid harassment.

Until last year, the income tax wing of the National Board of Revenue (NBR) used to select tax files on the basis of percentage, on an average 2.0 to 4.0 per cent of the total tax returns.

The volume of tax returns has been fixed after many taxpayers complained unusual harassment in the name of audit by the field-level tax staff.

The IRD fixed the number at 25,000 for last fiscal year, 1.96 per cent of 12,71,595 tax returns submitted by both individual and corporate taxpayers.

According to NBR statistics, the revenue board selected some 24,000 income tax returns for audit which is 2.5 per cent of the total returns of 9,64,778 in FY 2015-2016.

In FY 2013-2014, taxmen audited some 32,344 tax files or 3.63 per cent of total returns of that year.

Although the Large Taxpayers Unit (LTU) audits 100 per cent of its tax files, other tax zones select an insignificant percentage of tax files for audit.

However, it is alleged that some taxmen harass taxpayers and panic them by threatening to select tax files for audit.

Field offices primarily select a number of tax files based on selection criteria of universal self- assessment tax files that the NBR issued for the taxmen.

The taxmen then send the primarily selected tax files to the revenue board for its final approval.

Tax practitioners said some tax staffs get illegal financial benefits from the taxpayers by including their names in primary audit list.

It has been found that some staffs also prepared a fake list for audit and harassed taxpayers in old Dhaka earlier.

Restrictions on the number of audits would minimise harassment by some tax staffs, said a senior tax official.

Taxmen accept universal self-assessment tax returns without assessment but later scrutinise those on the basis of risk-factor set by the NBR, he said.

Currently, some 90 per cent of taxpayers submit income tax returns under universal self-assessment and the remaining taxpayers submit returns following general method.

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