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Home Breaking News

FTO directs investigation into minimum tax computational formula issue

byM Hayat
21/12/2021
in Breaking News, Lahore, Latest News, Slider News
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ISLAMABAD: Federal Tax Ombudsman (FTO) Dr. Muhammad Asif Jah has ordered an investigation into the matter of minimum tax computational formula endorsed by the Member Inland Revenue (Policy) Federal Board of Revenue (FBR), impacting whole minimum tax regime governed under the Income Tax Ordinance, 2001.

In this connection, the FTO office has issued a notice to the FBR. Through this order, the FTO has ordered an investigation on issuance of a controversial letter dealing with the minimum tax computational formula under section 153(1) (b) of the Income Tax Ordinance, 2001.

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The notices have been issued by the FTO to Secretary Revenue Division and Member (Policy) FBR, in a public interest complaint moved by tax lawyer Waheed Shahzad Butt against Member-IR Policy FBR.

FTO notice stated: “In a writ petition 57220/2021 titled Shahid Latif Khilji v. Federation of Pakistan before Hon’ble LHC petitioner argued that the FBR IRIS portal for the online submission of income tax returns (“IRIS”) was not letting the Petitioner to file his income tax return as per the self-assessment regime envisaged in the Income Tax Ordinance, 2001. Instead, IRIS was imposing its own calculations on the petitioner.

The LHC issued notice to the parties. Nouman Malik, Chief IT, FBR appeared and undertook to look into the issue agitated by the Petitioner and resolve the same by amendment in IRIS or otherwise, after following due procedure. Upon the said undertaking, LHC disposed of the matter. While disposing of the Petition, this LHC categorically held that the disputes relating to the calculation of tax and its apportionment relate to the system, which cannot be looked into by this Hon’ble LHC in constitutional jurisdiction.

FTO notice states: “If the calculation methodology governing filing of income tax return, which was challenged at LHC, was FBR’s official stance then how and why a contrary hypothetical illustration was endorsed by FBR’s Member-IR Policy. It was one man decision or represents the institutional consent.

If the option endorsed by Member IR Policy was not withdrawn and implemented: (a) would it adversely impact the whole scheme of Income Tax Ordinance, 2001, governing minimum tax regime or not, and (b) the income tax deducted under various provision of Income Tax Ordinance, 2001 shall become adjustable income tax against the income accrued outside the scope of these provisions enforcing as minimum tax regime or not, FTO order added.

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