PAC proposes blocking CNICs of tax defaulters

Recommends stay orders beyond six months should not be granted

ISLAMABAD: Public Accounts Committee on Tuesday proposed constitutional and legal amendments to suspend national identity cards of tax defaulters and bar the judiciary from granting stay orders beyond six months in financial matters.

The parliament’s accountability arm gave these recommendations to the government after it came to know that over Rs300 billion of tax revenue has been stuck up in litigation, majority of it for years. Chairman Federal Board of Revenue Dr Mohammad Irshad termed missing of effective tools in the hands of tax machinery, stay orders granted by the superior judiciary and weak legal defence teams of the FBR as main reasons behind piling up of the arrears.

The PAC had met under the chair of Ashiq Hussain Gopang and discussed the audit report on the accounts of the FBR that contained 56 objections amounting to Rs169.8 billion in the audit year of 2013-14.



We need parliament’s help to resolve the issue of stay orders as the courts have not been vacating the interim orders for years, which under the law should be vacated maximum after six months, said Dr Irshad while terming it as a barrier in recovering arrears.

The FBR’s member operations Rehmatullah Wazir said that Article 199(4) A has created confusion that the courts can give stay orders for an indefinite period and a constitutional amendment may be introduced to bring clarity.

The Article 199 (4) a of the Constitution states that subject to the Constitution, a High Court may, if satisfied that no other adequate remedy is provided by law, can give a stay order.

The PAC asked the government to take up the matter with the Ministry of Law and devise a mechanism where in the financial matters the stay orders should not be given or be vacated maximum after six months.

The FBR chairman said that on non persuasion of court cases, the FBR has replaced many lawyers on its panel. Besides, the minimum fee of an FBR-hired lawyer has been doubled to Rs60,000, he added.

However, it is not only the superior judiciary that has been granting stay orders. The Inland Revenue tribunals have also been equally responsible. The FBR’s own officers are the members of these tribunals who have been granting stay orders in almost every case.

However, the legal experts say that FBR’s habit of arm-twisting the taxpayers by issuing of irrational tax demands is also one of the main reasons behind growing numbers of stay orders by the appellate tribunals and the superior judiciary.



The PAC also asked the FBR to suspend the Computerised National Identity Cards (CNIC) of those citizens who are tax defaulters. But the chairman FBR said that he does not have legal powers to do that.

The FBR should get legal powers to suspend the CNIC of the tax defaulters, directed the acting PAC chairman.

The acting Auditor General of Pakistan Haq Nawaz also endorsed the PAC views and recommended that the government should give these powers to the FBR through the Finance Bill 2017 that it will table in the Parliament next month for the approval of budget for fiscal year 2017-18.

The PAC expressed satisfaction over the systemic improvements that the FBR has brought to reduce the pendency of disputed cases. However, it was not happy with the FBR’s performance on the issue of taking its officers to the task.

The FBR has not initiated disciplinary proceedings against any of its officials on charges of not recovering arrears which was a matter of serious concern, said Ashiq Gopang.

Dr Irshad contended that in last two months the FBR either recovered or got settled Rs25 billion worth audit objections. He said that in order to stop leakages of the withholding taxes, the digital directory of the withholding agents will be launched next week. There will be real time monitoring of the withholding agents including banks and telecommunication companies.

In its four budgets, the PML-N government has drastically changed the tax structure of the country and now 87 per cent of its total tax collection comes from the indirect taxes and the withholding taxes. There are over 72 withholding tax clauses in the Income Tax law, having no precedent in the region.