The National Board of Revenue (NBR) has issued new guidelines ensuring that a taxpayer’s return will not be audited again for the next three assessment years, provided there is no significant risk of revenue loss. The directive, issued on Sunday, aims to curb tax evasion and promote transparency in tax administration.
The guidelines set strict rules for return verification, audit selection, and report submission. New taxpayers must file returns regularly from their first year to qualify for exemptions or other benefits. Returns missing required information or supporting documents will be rejected, and taxpayers are required to submit a Statement of Financial Position (Balance Sheet) and a Profit & Loss Account.
Audits will be conducted by chartered accountants or cost and management accountants authorised by the NBR. They will collect necessary documents from taxpayers’ offices and submit reports within a fixed timeframe. Short reports must be submitted within seven working days, while full audit reports must reach the NBR within a maximum of 60 days. Taxpayers can provide written explanations, but if they fail to respond, auditors will verify documents directly and prepare the report.
The guidelines also clarify that first-time returns submitted under the self-assessment system should not be selected for audit unless specific information indicates a high risk. Observations from previous audits must be complied with in subsequent returns, and simultaneous audits of multiple years for the same taxpayer are not allowed. Taxmen have been instructed to avoid assumptions and explicitly state which documents or evidence are missing in determining income and expenditure.
NBR officials said the new measures will reduce tax evasion, enhance transparency, and provide clear benefits to taxpayers who file returns regularly.