On Tuesday, a Senate panel recommended that the government fire tax collectors who had issued exorbitant tax demands and then rejected taxpayers’ appeals because they were under pressure from the Federal Board of Revenue (FBR) headquarters.
The Senate Standing Committee on Finance made the unanimous proposal in the wake of a significant increase in tax assessment orders issued by the Federal Bureau of Revenue (FBR) against taxpayers. This led to a 70% surge in tax-related litigation, with the disputed sum rising from Rs3 trillion to over Rs3 trillion in the span of eight months.
The standing committee determined that any FBR commissioners who made unreasonable tax demands or rejected taxpayers’ appeals against these demands should be terminated, and the decision was unanimous. The committee underlined its dissatisfaction with what it described as the “high-handed” manner in which the FBR dealt with taxpayers in reaching its judgment in its report.
Senator Talha Mehmood, of the Jamiat Ulema-e-Islam-Fazl (JUI-F), the chairman of the Standing Committee, informed the committee that he would work to have the recommendation adopted by the Senate in order to put further pressure on the government to accept the advice.
Read Also: CDC reduces basic tariff
For more than a year, the FBR has concentrated its efforts on high-profile cases in order to issue tax demands based on the suspicion that even those who were registered and those who filed tax returns were not fully complying with their obligations.
According to Talha, who was reading from a document from the FBR, the FBR issued approximately 52,000 tax notices and raised a tax demand of approximately Rs31.9 billion in 2018. According to him, the number of tax notifications has climbed to 87,000, and the demand has increased to Rs1.8 trillion in 2020-21.
It was stated by the chairman of the standing committee that tax collections were not matching tax requests, implying that excessive tax demands were made.
On June 29 and 30, Talha got phone calls from FBR commissioners who claimed that they were being pressured to issue tax notifications and deny appeals. According to Talha, the FBR applied pressure to the commissioners on those days as well.
Qaiser Iqbal, the FBR’s new Member of Inland Revenue Operations, categorically denied the allegations. According to Iqbal, “I pledge as a gentleman that there was no pressure from the FBR headquarters to decide appeals in favor of or against anyone,” he added.
In his statement, he stated that the amount and number of tax notices increased after the FBR changed its approach and decided to reassess every Rs1 billion in turnover and above. “
Senator Faisal Sabzwari of the MQM-P said that Finance Minister Shaukat Tarin had pledged that the Federal Board of Revenue (FBR) would not issue new tax notices and that in cases where improper notifications had been received, they would be recalled, but that these pledges had not been kept.
According to the standing committee, the Federal Bureau of Revenue (FBR) must give information on tax demands made, appeals denied, and recovery made against letters sent over the previous five years.
