The Comptroller and Auditor General (CAG) recently reported that the CBIC is struggling with a significant shortage of staff for its auditing teams. As of July 1, 2024, nearly 38% of the positions are unfilled. This lack of personnel is causing delays and gaps in the audits that the CBIC plans to conduct.
The crucial role of internal audits in ensuring taxpayer compliance under the self-assessed tax regime has been outlined by the report of CAG on the Department of Revenue for the period ending March 2023.
“As of July 1, 2024, 38 per cent of positions in the Audit Formations of the CBIC were vacant. As a result, there is no significant increase (marginal increase of 4 per cent) in the number of units selected for internal audit during FY’23 over FY’22,” the CAG stated.
Over the years, the audit completion rates have depicted improvement with units audited attaining 26% in FY’21, 48 percent in FY’22, and 70 percent in FY’23 of the total planned units.
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“Although there had been an increasing trend in the percentage of units audited vis-à-vis units planned from FY’21 to FY’23, there is still a gap between the numbers of units planned and audited,” the CAG mentioned.
Marginal revisions have been exhibited in the recovery rates from audit findings.
The percentage of total recovery has surged to 18% in FY’23 from 17 per cent in FY’22, but remained below FY’21’s rate of 21 per cent.
According to the CAG, the department’s action against non-compliant taxpayers is limited to the period specified under the Goods and Services Tax (GST) Act.
CAG suggested that, concerning this matter, the Ministry has taken measures to increase the manpower in the audit formations of the CBIC to the optimal level.
