National Board of Revenue (NBR) has selected 15,494 income tax files for audit through a random selection process, aiming to curb potential tax evasion.
To ensure full transparency in the audit selection process, the NBR has begun selecting income tax returns in a fully automated manner, using a Risk-Based Audit Selection Criterion, according to a press release.
However, as the complete data entry of paper-based offline tax returns is still in progress, more time is needed to implement the automated system entirely.
In the meantime, to continue audit activities, the NBR has digitally selected 0.5% of all returns filed in each tax circle for the 2023–24 tax year through a random method. Returns previously audited in the past two years have been excluded from this selection to avoid repeated audits of the same taxpayers.
This interim method has resulted in the selection of 15,494 tax files across all tax commissionerates in the country.
While the NBR acknowledges that random selection ensures transparency and impartiality, it also notes that the method may carry some uncertainty regarding outcomes.
The NBR reiterated its commitment to transitioning fully to the risk-based audit system after completing the data integration of all paper returns, which it believes will help achieve the desired revenue goals while ensuring fairness and effectiveness in the audit process.