ISLAMABAD: The Directorate General of Internal Audit Inland Revenue (IR) has unearthed loopholes in the sales tax refund payment system where fraudsters successfully escape the risk parameters to obtain bogus refund claims.
According to details, Directorate General of Internal Audit (IR) Director General Sajjad Haider Afzal Cheema has submitted a comprehensive report to the FBR Chairman on the performance of Inland Revenue and effective measures to check bogus refund claims.
In the report, he stressed the need for special inspection of Central Registration Office (CRO) and Centralised Sales Tax Refund Office (CSTRO) to check loopholes in the refund payment system. He cited some instances wherein fraudsters successfully escape the risk parameters put up to check bogus refund claims. The CISTRO needs to be strengthened by introducing stringent checks in the system. A detailed analysis of the system would ensure smooth processing of refund claims and plugging the leakage which exists in the system.
The directorate has also asked the FBR to provide access of all electronic and computerised systems containing taxpayers” information. The directorate can accomplish the task only if it is empowered with necessary tools. It is therefore, requested that Inland Revenue Audit officers working in the office of DG Internal Audit (IR) may be given access to ITMS, TAMS, WeBOC, Smart, Taxsys, Regsys and Crest as no meaningful work is possible without access to these programmes.
The Sales Tax Audit has remained a neglected area ever since the merger of Income Tax, Sales Tax and Federal Excise. It is proposed that the inspection of Audit conducted by the LTU/RTO under section 25 & 38 of the Sales Tax Act, 1990, will be made to check the quality of audit work. The discrepancies found during this exercise may be communicated to the field formations and Board as well.
The DG has informed the FBR chairman that the Directorate General of Internal Audit (IR) had been assigned specific statutory functions/duties through different SROs, issued from time to time. The main objective behind creation of this particular directorate is to maintain internal control/check over the tax administration and ensure judicious application of tax laws, rules, procedures and instructions of the board.
