IT firm under FBR scrutiny

The Federal Board of Revenue (FBR) has served an income tax audit notice to an information technology company on suspicion of evading taxes by claiming higher expenses and understating imports amid the government’s increased focus on plugging revenue leakages. The FBR has requested records and books of accounts from M/s Pronet Private Limited under Section 177 of the Income Tax Ordinance, suspecting tax evasion during the tax year 2023, according to senior FBR officials. They stated that the company’s books need scrutiny after tax authorities found glaring inconsistencies in income tax returns filed over the past seven years. The company’s records were obtained through intervention from the FBR headquarters, as it emerged that the Karachi field tax office was aiding tax evasion. Sources revealed that the field office dealt with tax notices regarding short deductions of millions of rupees in withholding taxes, settling at a few hundred thousand for tax years 2016 to 2022. These notices were quietly settled in 2022.