NBR selects 600 entities for VAT audit under fully automated system

The National Board of Revenue (NBR) has, for the first time, selected 600 entities for VAT audits through a fully automated process, marking a significant step toward enhancing transparency and efficiency in tax administration.

According to a press release issued today (2 April) the move follows the successful implementation of the Automated Risk Management Module, integrated into the e-VAT System.

This module initiates the selection of entities for audit entirely automatically, based on 20 defined risk criteria, eliminating any possibility of manual intervention.

The initial batch of 600 selected entities has been published on the NBR website.

Of these, 405 are manufacturing entities, 98 are service providers, 65 are wholesale and retail traders, and 32 are importers and exporters.

Under the new system, entities are chosen for audit according to precise risk parameters and assigned weightages reflecting the level of risk.

Officials noted that this process addresses long-standing demands from taxpayers and civil society for a transparent and impartial audit selection mechanism.

The NBR also indicated that if the audits of the selected entities do not yield effective results, the risk criteria and weightages will be reviewed and adjusted accordingly.

According to NBR authorities, the automated system is expected to enhance transparency, impartiality, and operational efficiency in VAT administration.

Officials also stated that it is also aimed at fostering a more taxpayer-friendly environment while curbing revenue leakage.