Businesses urge FBR to take back discretionary powers

Insist such decision will provide relief to taxpayers, simplify tax laws

KARACHI: Businessmen have urged the Federal Board of Revenue (FBR) to withdraw the discretionary powers given to tax officers so their misuse could be avoided.

They argued that such a decision would provide relief for taxpayers, simplify taxation laws and restore the declining confidence of the public in taxation laws - a pre-requisite for success of any scheme.

At a webinar with authorities concerned on Wednesday, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar proposed that the interest of taxpayers could be safeguarded against the misuse of discretionary powers.

Regarding the law of multiple audits and the amendments made, he said although a tax return filed within the time limit qualified for the Universal Self-Assessment Scheme (USAS) but it might be amended within five years from the end of the financial year in which the return was filed.

Nisar lamented the posting of Inland Revenue officers on business premises under Section 40B of Sales Tax Act 1990 to monitor production, sales of goods and stock position. He stressed that such a law was outdated and unnecessary in the modern era of computerisation and at a time of efficient methods of monitoring the entire production and supply chain.

“It gives a perception of anti-business and anti-investment government policies, leads to harassment and is tantamount to the revival of clearance scheme of central excise in the Sales Tax Act 1990,” he said. FPCCI’s Budget Advisory Council Convener Zakaria Usman proposed that powers to select the tax return may rest only with the FBR, which already had powers to select audit cases randomly.

“In case where definite evidence is available with the department, audit should be initiated in relation to the transaction in question only,” he added. “These discretionary powers provide sufficient incentives to Inland Revenue officials to serve audit notices on the commercial importers who have already discharged their tax liability at the time of clearance of goods.”

He added that such clauses also promoted direct contact between taxpayers and tax officials, which was against the government policy as it encouraged tax evasion and corruption.

Published in The Express Tribune, May 21^st, 2020.

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