Correct, Transparent Financial Statements

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The government has achieved marvelous milestones of broadening of tax net along with declaration of assets through perhaps the most successful tax amnesty scheme. Under this scheme more than one lac new people have brought in the tax net and from this year to coming years, these new entrants will file their returns along with paying their taxes regularly.
Similarly, a large number of companies and association of people have also entered in the tax net along with submission of their financial statements. However, there is a need of the hour to ensure the correct and transparent submission of financial statements by the individuals and companies. In this regard, both the Federal Board of Revenue and the Securities and Exchange Commission of Pakistan (SECP) are required to enhance their collaboration. In this connection, FBR has moved to SECP to ensure correct and transparent submission of financial statements by the companies. In his letter the Chairman has stated that it has been observed that in many cases the quality of the accounts/financial statements prepared by the financial businesses specially in the cases of private limited companies is not in line with the quality standards and in many cases huge additions to income, are made, which are in many cases, are non-defensible, in taxation proceedings.
The quality of Audit by the taxation officer is not as per best practices. FBR is improving the system and shall seek Institute’s assistance or guidance on the matter, he added. The extension in date of filing for return for companies also for Tax Year 2018 has only been given to provide an opportunity to the companies, especially private companies, to review their accounts and file improved position if required.

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