Government to stop sending tax defaulter cases to FIA

Wants to avoid harassment of taxpayers by withdrawing FIA's powers

ISLAMABAD: The government on Wednesday decided against sending tax defaulter cases to the Federal Investigation Agency (FIA) in a bid to stop harassment of taxpayers by the agency and the Federal Board of Revenue (FBR).

The decision was taken in first meeting of the FBR Policy Board, which met under the chairmanship of Finance Minister Asad Umar. The board was set up under the FBR Act of 2007, but remained dysfunctional during the tenure of previous Pakistan Muslim League-Nawaz (PML-N) government and even before.

"After a detailed briefing by the FBR chairman and sharing of views by the members, it was decided that the Senate Standing Committee on Law and Justice shall be asked to review FBR laws where criminal investigation agencies have an overlapping jurisdiction with the FBR so that the authority of FBR may be ascertained," according to a statement issued by the finance ministry.



The issue of harassment of taxpayers was raised by Senate Standing Committee on Finance Chairman Senator Farooq H Naek, who is also a member of the Policy Board. It was decided that all the relevant laws would be reviewed and wherever the FIA had any authority, it would be withdrawn.

It is not clear what will be the status of the predicate tax offences, committed under the Anti-Money Laundering Act of 2010.

The FBR has been accused of arm twisting of taxpayers by exploiting them to send their cases to the FIA for investigation.

The Policy Board also directed the National Database and Registration Authority (Nadra) chairman to start work on proposals for broadening the tax base through the use of data already available at the NADRA database. The suggestions in this regard will be reviewed by the Policy Board in detail for further action.



The finance minister is the chairman of the Policy Board and ministers for commerce, textile, industries and privatisation are its ex-officio members. Chairmen of standing committees on finance and revenue of the Senate and National Assembly are also its ex-officio members.

The FBR chairman is the secretary of the board. Among nominated members in the advisory capacity are Hammad Azhar, Senator Kauda Babar, Syed Javed, Usman Yousaf Mubeen, NADRA chairman, and Abdullah Yousaf, former chairman of the FBR.



The FBR chairman gave a briefing on various administrative steps that it had taken in the past six months. He spoke about the separation of tax policy and administration and draft of the FBR transformation plan.

It was also informed that the Swiss Avoidance of Double Taxation Treaty had been ratified and 152,201 offshore bank accounts of Pakistani nationals had been identified under the Organisation for Economic Cooperation and Development (OECD) agreement.

The FBR also sent tax notices to 6,451 high net worth non-filers and recovered Rs245 million in revenues. Over 4,961 potentially undeclared properties abroad have also been identified with the help of the FIA.

Abdullah Yousaf stressed the need for systemisation through automation so that the elements of harassment and use of discretionary powers may be minimised. He was also directed by the chair to make a detailed presentation on the audit and inspection system of the FBR and suggest improvements.

The presentation will be first shared with the minister of state for revenue and later it will be brought to the Policy Board for further action.

The minister of state for revenue said the FBR Policy Board may design terms of reference for bridging the gap between policy and administration. The FBR machinery is resisting the separation of policy from its operations.

It was also decided that the Policy Board shall hold its regular meetings on a quarterly basis and the next meeting will be held in mid-March.

Published in The Express Tribune, February 14^th, 2019.

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