FBR Launches Income Tax Audit on Pronet Private Limited

The Federal Board of Revenue (FBR) has initiated an income tax audit against an information technology company, M/s Pronet Private Limited, suspecting tax evasion through inflated expenses and understated imports. The FBR's move comes amidst a heightened government focus on curbing revenue leakages.

Senior FBR officials have disclosed that the company's income tax returns for the past seven years exhibited significant irregularities, prompting the need for a thorough scrutiny of its financial records. The FBR headquarters intervened after discovering potential tax evasion facilitated by the Karachi field tax office.

Finance Minister Muhammad Aurangzeb emphasized the government's commitment to bolstering tax enforcement and expanding the tax base to improve the low tax-to-GDP ratio. Prime Minister Shehbaz Sharif took action against a senior tax officer following a case where a company obtained a stay order against an audit notice.

The FBR's decision to audit M/s Pronet Private Limited for the tax year 2023 aims to uncover the extent of tax evasion. Initial assessments suggest a substantial amount may be involved, with discrepancies found in the company's declared profits, expenses, and tax payments.

The company's financial records indicate inconsistencies, such as questionable project expenses, underreported imports, and unusual liabilities, raising red flags for potential tax evasion. The FBR's scrutiny will focus on verifying these discrepancies to ascertain the accuracy of the company's tax filings.

Overall, the income tax audit of M/s Pronet Private Limited underscores the government's commitment to combat tax evasion and strengthen revenue collection efforts, signaling a stricter regulatory environment for businesses to ensure compliance with tax laws.