Pursuant to a Memorandum of Understanding (MoU) agreed between the Federal Government and the Institute of Chartered Accountants of Pakistan (ICAP), the Federal Board of Revenue (FBR) has now commenced the process of outsourcing of tax audits to firms of Chartered Accountants under the Tax Audit Framework (TAF). The FBR has in this respect issued a letter No. 1(7)-S (T.A)/2009(Corp.) dated December 11, 2009, a copy of which is attached for your ready reference.
The guidelines to be followed by firms of chartered accountants for carrying out the tax audit are included in the TAF, as developed by ICAP and notified as mentioned in FBR’s aforesaid letter. The complete version of the TAF is available on ICAP’s website.
The Federal Government had, through the Minister for Finance and Economic Affairs and the officials of the FBR, approached ICAP for the development of a framework to conduct audits of companies, incorporated under the Companies Ordinance, 1984, liable to collect and / or pay tax and / or duty under the provisions of the Income Tax Ordinance, 2001, the Sales Tax Act, 1990 and the Federal Excise Duty, 2005. ICAP had undertaken the task of developing the subject framework as a national duty by employing the expertise available to it through its members. The TAF was formalized following extensive deliberations amongst the officials of the FBR and the members of the Taxation Committee of ICAP. It is expected that members of ICAP shall conduct the subject tax audits with the same spirit. We believe that Pakistan’s chartered accountancy profession shall in this manner contribute to the Federal Government’s efforts towards a fair collection of taxes and duties which is an important element for achieving sustainable economic growth.
On behalf of ICAP, I would like to place on record the keen interest taken by Mr. Shaukat Tareen, Federal Minister for Finance and Economic Affairs and Mr. Sohail Ahmed, Chairman FBR, without whose support the TAF would not have been formalized.
Further and on behalf of ICAP I acknowledge the contribution of Syed Mohammad Shabbar Zaidi, as the Chairman of the outgoing Taxation Committee and its members in developing the draft TAF and that of Syed Asad Ali Shah, in his capacity as the President of ICAP in concluding the MoU with the Federal Government. ICAP’s present Taxation Committee took over the task of reviewing the draft TAF and liaising with the FBR for getting it finalized and eventually notified.
The Taxation Committee of ICAP plans to conduct workshops at Karachi, Lahore and Islamabad to assist its practicing members to understand the requirements of the TAF. The Chairman FBR has also expressed an interest for similar programmes to be run for the benefit of the tax assessing authorities. The details of such programmes will be circulated in due course.