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ISLAMABAD:
The Federal Board of Revenue has served audit notices to three prominent opposition politicians, including a former finance minister, in what some in the opposition are calling a political witch-hunt by the government.
The FBR served tax audit notices to former Finance Minister Saleem Mandviwala of the Pakistan Peoples Party (PPP), Senator Ilyas Bilour of the Awami National Party (ANP), and Senator Mohsin Aziz of the Pakistan Tehreek-e-Insaf (PTI). All three are members of the Senate Finance Committee, and Senator Mandviwala is the chairman.
The revelation that all three were being audited came during a committee meeting about the FBR. All three confirmed that they had been selected for an audit.
Mandviwalla termed the government’s move “targeted” that he said was aimed at “silencing their voices” and asked acting FBR Chairman Shahid Hussain Asad to name any members of the ruling party who were served audit notices.
Asad said that the tax authority was not targeting opposition politicians, claiming that the audit notices are served after a randomised computer balloting.
Read: Lacking in regulation: System lapses lead to rampant tax forgery
The FBR’s tax audit department remains one of its weakest. The International Monetary Fund has been pushing the government to make the tax audit system more effective. The government currently relies on universal self-assessment: the income tax paid by a person or company is treated their final liability until the name is picked at random for an audit.
The last random computer balloting held on September 14 to conduct audits for tax returns from fiscal year 2014, which ended June 30, 2014. Random computer ballots were conducted for six categories: corporate cases of income tax, sales tax and Federal Excise Duty and individual cases of income tax, sales tax and FED. A total of 75,871 persons have been selected for audit. The National Tax Numbers (NTNs) of those selected for audit are made public on the FBR’s website.
CNIC numbers or NTN
The committee also sought an update on the government’s claim that Computerised National Identity Cards (CNIC) numbers will be treated as NTNs for individuals from September 1.
To the shock of the committee members, the acting FBR Chairman said that replacement of NTN number with CNIC number did not mean that a taxpayer is not required to apply for registration and seek a number. He said the only difference will be that instead of allotting a new number, the person’s CNIC number will be their NTN.
The government had made an amendment in the 2001 Income Tax Ordinance to declare that CNIC numbers could be used as an NTN as part of condition imposed by the IMF under its $6.2 billion bailout programme. Asad said that there were 80 million CNIC holders and not all of them can be treated as regular taxpayers.
Read: FBR says notices will be issued over non-compliance
The committee members showed their displeasure over the affairs of the FBR, asking the government to facilitate the taxpayers instead of harassing them. Mandviwala revealed that KPMG Senior Partner Masood Naqvi recently wrote a letter to Finance Minister Ishaq Dar, complaining that the FBR chairman has illegally stopped tax tribunals from issuing judgements that give relief to complainants, effectively forcing them to favour the FBR in all tax disputes.
He said FBR Chairman Tariq Bajwa issued the verbal orders to the Commissioner Appeals and to the Appellate authorities, which was unlawful act. The orders were issued after taxpayers approached the adjudicators against growing harassment by taxmen.
FBR officials said that over 52,000 cases were pending for decisions by the Commissioner Appeals, Appellate benches, high courts and in the Supreme Court of Pakistan. The committee sought details of these cases and the money involved in these tax disputes.
Published in The Express Tribune, September 19th, 2015.
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