LAHORE: Coercive measures as well as illegal and unnecessary action of the tax authorities have discouraged the taxpayers which is evident from the fact that the number of taxpayers has reduced from 1.4 million to merely 0.8 million while the Voluntary Tax Compliance Scheme (VTCS) has also not produced desired results as just 10,000 returns have been filed against the target of 10 million.
These views were expressed by newly elected President of the Lahore Tax Bar Association (LTBA) Farhan Shahzad while talking to Customs Today.
He said that suspension and blacklisting of sales tax registration on frivolous ground and without issuance of notices is an unjust act on the part of the Regional Tax Offices (RTOs) which is not only discouraging the taxpayers but also damaging the running business.
The LTBA president believed that suspension and blacklisting should be done only in the case where tax is evaded and fraud is committed by the taxpayers.
The LTBA president stated that most of the RTOs officials have engaged most of the taxpayers as their client and only their clients are at peace while all the other taxpayers are harassed and snubbed.
Section 182 is being used for recovery which is a violation of law, he said, adding that the section is used as a precautionary measure urging the tax payer if they don’t pay their tax liabilities.
While talking about registration of sales tax he said that the registration is made cumbersome and complicated which needs to be authorized at the chief commissioner level and the chief commissioner should decide it within seven days in any case.
To a query, Farhan Shahzad said that refunds of sales tax and income tax are being unnecessarily delayed which should be released immediately with the compensation while IRIS system needs a complete overhauling in order to curtail interference of department officials.
He added that section 11(2) is being misused as taxpayers who demand their refund and exemption the department usually initiate 11 (2) proceedings of audit and tax evasion which is grave unjust to the tax payers.
In order to enforce 11(2) the department first should audit and after that audit recovery should be made, he added.
The Federal Board of Revenue top brace to take notice of the misuse of suspension and black listing of sales tax registration, unnecessary delays in the process of sales tax registration, harassment, misuse of section 38, 21 of Sales Tax Act and section 182 Income Tax Ordinance, abnormal delays in refund issuance and abnormal delay in grant of appeal effect, he concluded.
