Under Provision

An “under-provision” is a state of affairs. It’s neither an asset, an expense, an income nor a liability. It’s what you have discovered to be the situation. It’s a result of what you have done …. you have under-provided

When you made the provision (first year, so no brought forward position to worry about) you debited the expense to profit or loss and you credited the liability that appears on the statement of financial position. Let’s say that you provided $100

Subsequently you discover that the provision should have been $125 so you have an under-provision of $25.

But that $25 is neither asset nor liability, neither income nor expense. It’s a state of affairs

Dare I guess that you’ve discovered the expression in the context of a balance on a trial balance and the question says that the balance in the current tax account represents an under / over provision of last year’s tax liability?

It all depends on what is showing on the T-account in the trial balance. If it is a credit balance then it will be an over-provision from the previous year and thus reduces the tax expense this year. If it is a debit balance then it will be an under-provision and thus increases the tax expense this year.