Undue favours: FBR questioned over powers to waive taxes

PAC also orders audit of a project of installing scanners by National Logistic Cell.


Shahbaz Rana September 27, 2012

ISLAMABAD:


The Public Accounts Committee (PAC) on Wednesday questioned the powers of tax authorities to change rates or waive taxes to “benefit a few individuals and companies”.


The PAC also ordered audit of a project of installing scanners by the National Logistic Cell – a half a billion rupee scheme that was designed to control smuggling, but failed to yield the desired results.

The scanners were meant to check sealed containers at seaports, dry ports, and border crossings without opening them. Headed by Nadeem Afzal Chan, the PAC directed the office of the Auditor General of Pakistan to brief the parliamentary accountability body over the existing laws, powers of the Federal Board of Revenue (FBR) and implications of such powers, if any.

SRO culture

“As cars arrive at ports in Karachi the FBR issues a statutory regulatory order (SRO), gets the vehicles cleared and then withdraws the same SRO,” said PAC Chairman Chan hinting at corruption in the FBR.

Turning down FBR’s views that the powers it enjoys were delegated by Parliament, Chan said that even the government could not change tax rates without parliamentary approval.  FBR’s Member Legal Aqil Mirza said that under the laws, the FBR can provide relief, exempt any industry from tax or reduce the tax rates, but cannot increase the taxes.

FBR Chairman Ali Arshad Hakeem admitted that almost 85% of the sectors in the economy have been protected through various SROs.

“The SROs culture is rampant and holes have been created in the economy through these SROs,” said Hakeem while endorsing the PAC’s views about the SRO culture in the country.

Scanners project

The Accountant General of Pakistan Revenues Farah Ayub Tarin told the committee that as against the required six scanners by 2007, the FBR has so far installed five, and one of them was not installed at the sensitive point selected under the project. Instead of the Pak-China border at Sust or the Pak-Afghan border at Chaman, the FBR installed the scanner at Wagah border, where smuggling was less likely. The PAC ordered the audit department to critically review the project.

The PAC rejected FBR’s plea that the board has the right not to give the audit department access to the record, and gave it a month to cooperate with the audit department.

Auditors told the PAC that their objections go unanswered and as many as 1,227 audit paras involving billions of rupees were pending due to the non-serious attitude of the FBR officials.

Published in The Express Tribune, September 27th, 2012.

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