Forensic lab to detect corporate tax evasion

Tax authorities will install ‘data forensic laboratory’ next month to detect tax evasion through paperless accounts system of the corporate taxpayers.

The lab is set to start its operation from February at the Central Intelligence Cell (CIC) with advance devices that are capable of detecting concealment of electronically maintained accounts information of the corporate houses.

Taxmen are currently conducting assessment under manual system due to the absence of modern equipments to find out mismatch and irregularities in electronically maintained financial records, FE reports.

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Equipment and devices in the laboratory can detect and analyse digital data of the corporate houses.  Most of the large taxpayers are currently maintaining digital book-records for keeping data of their financial transactions.

Tax authority smelt manipulation of financial records by many but unable to detect most of them due to lack of expertise.

The NBR has imparted training to some of its officials in the Central Intelligence Cell to investigate the suspected corporate houses after collecting data from digitalised accounts system.

The forensic lab can recover actual accounts data through its devices, even taxpayers delete or manipulate those.  It can track specific data, crack password and clone data of corporate houses.

A senior tax official said dual accounts manitance practice is rampant among the corporate houses to evade tax by concealing actual income.

Paperless accounts with high-tech devices used for corporate accounts maintenance often puzzle taxmen while trying to detect evasion, the official said.

Audit and investigation of those corporate accounts need special expertise and modern devices which was absent hitherto in the tax wing, he said.

The lab already procured data forensic software, write blocker software, password recovery software and text analytic. Hardware of the lab includes forensic duplicator, forensic workstation, write blocker, storage server, pre-cloning viewer and high-end laptop.

Currently, tax authority depends on few large taxpayers, especially commercial banks, for its corporate tax while a large number of companies show loss for years.

Tax officials said many of the companies maintain two books of accounts to show a manipulated financial transaction to the tax authority.

Installation of the advance high-tech lab would help the tax authority find out tax dodging through digitalised accounting system.


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