NBR selects 600 firms for VAT audit through automated system

The National Board of Revenue (NBR) has selected 600 businesses for value-added tax (VAT) audit through a fully automated system, aiming to ensure greater transparency in the audit process.

In a press release, the revenue authority said it has successfully implemented an Automated Risk Management Module within the e-VAT system to facilitate audit selection based on risk assessment.

Under the new system, firms are being selected automatically using 20 risk criteria, each assigned specific weightage depending on the level of risk exposure. The process eliminates any scope for manual intervention, addressing long-standing demands from taxpayers and civil society for a transparent and impartial audit mechanism.

According to the NBR, the risk-based automated selection is expected to enhance fairness and efficiency in VAT administration, while also helping curb tax evasion.

Initially, a total of 600 firms have been selected and published on the NBR website. Of them, 405 are manufacturing entities, 98 service providers, 65 trading firms, and 32 importers/exporters.

The NBR noted that the effectiveness of the risk criteria and assigned weightage will be reviewed and adjusted in the future if the audit outcomes do not yield satisfactory results.

Officials say, this automated approach will make the VAT system more taxpayer-friendly while strengthening compliance and revenue mobilisation.

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