FBR warns of audit action over mismatch between lifestyle, declared income

KARACHI – Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial on Monday said that traders whose lifestyle does not match their declared income will face audit proceedings as part of efforts to improve tax compliance and documentation of the economy. Speaking during a television programme, FBR Chairman Langrial clarified that it is incorrect to assume that payment of a fixed amount of Rs25,000 fully exempts traders from broader tax obligations. He said that if a trader’s standard of living appears disproportionately high compared to declared earnings, the tax authority will initiate an audit to verify actual income and business activity. Langrial added that traders with higher sales volumes are required to pay tax according to applicable rates and existing legal frameworks. He also noted that around seven million individuals are currently not paying taxes in line with their actual income. The FBR chairman further said that the super tax imposed on the corporate sector was not an ideal policy measure in principle, but was introduced under specific fiscal and economic pressures. He said the FBR is focusing on strengthening enforcement and compliance mechanisms to ensure a fair and broadened tax base across the country. Strait of Hormuz deal hopes drag global oil prices to March lows