LAHORE: Auditor General of Pakistan (AGP) has detected variation of Rs 1.128 billion in refund figures of income tax, sales tax & federal excise as reported by Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) during 2013-14. FBR has issued instructions to the field formations for reconciliation of data to check variation in FBR’s figures of refund of tax receipts and those of SBP.
The AGP has asked FBR to carry out reconciliation of refund figures of tax receipts with SBP for sorting out the variations. According to the FBR, audit observation No 09 has been raised by the office of the Director General Audit, Inland Revenue (North), Lahore with the FBR during the Financial Attest of the Financial Statements of Federal Government (Revenue Components) for the FY 2013-14, at “national level”.
The FBR has directed that concerned field offices to check the figures of “Refunds” reconciled with the office of the AGPR or its respective Sub-offices and SBP and get the position rectified at the earliest. A perusal of the table mentioned in the Audit Observation however, indicates that the substantial variation of “Refunds” is under the Head of Customs Duty i.e. Rs 1.114761 billion. All Model Customs Collectorates (particularly at Karachi) are therefore, directed to look into the amount of the refunds, get them reconciled with the office of the AGPR or its respective Sub-office and then with the SBP, FBR’s instructions added.
As per office of the AGP, according to Para 3.4.2.12 of Manual of Accounting Principles, each entity is required to reconcile its books of accounts with the bank records at the close of each month. This reconciliation is to be performed in accordance with the policies and procedures set out in the Accounting Policies and Procedure Manual, GFR and Federal Treasury Rules.
Scrutiny of FBR”s record of refund of direct & indirect taxes and SBP”s record of payments of refunds disclosed variations in figures of refunds on account of income tax, sales tax & federal excise of Rs 1.128.249 billion, the SBP”s total is higher than that of FBR.
Variation in figures of refund of tax receipts may impair true and fair presentation of financial statements. FBR treasuries and FBR’s Directorate of Research and Statistics (DR&S) should carry out meaningful reconciliation of refunds of tax receipts with SBP/NBP at micro and macro level for sorting out the above mentioned variations besides institutionalizing it in the system.
