ISLAMABAD: The International Monetary Fund (IMF) has advised suggested that the Federal Board of Revenue (FBR) and provincial revenue authorities to implement a risk-based auditing system for taxpayers.
The auditing system should focus taxpayer noncompliance risks, defined as the likelihood of yielding large amounts of audit adjustments.
The IMF has also asked Pakistan to make tax evasion as a criminal offence in order to further enhance tax net. It further suggested that fighting tax evasion should initially focus on a comprehensive list of high-wealth individuals and corporate entities they control and prohibit the so-called ‘benami’ transactions, which are commonly used for tax avoidance and evasion.
The International Monetary Fund said that in order to improve taxpayer compliance and curb tax avoidance and evasion, reform efforts must aim to modernize and bolster the effectiveness of tax administrations at federal and provincial levels by reorganizing along functional lines, integrating databases and information technology, and requiring a tax identity number in all financial and immovable property transactions.
