LAHORE: The trade and industry leaders have urged the Federal Board of Revenue (FBR) to withdraw the discretionary powers vested with the tax officials to avoid their misuse, providing relief to the taxpayers, simplify taxation law and restoring the diminishing confidence of the assesses in the taxation department.
Dr. Muhammad Arshad, Regional Chairman & Vice President and Zakaria Usman, Convener, Budget Advisory Council of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) while presenting budget proposal to the concerned quarters including Dr. Hafeez Shaikh, Advisor to the PM on Finance & Revenue, Razak Dawood, Adviser to PM for Commerce, Textile and Investment and Nausheen Javaid Amjad, Chairperson, FBR said that the FPCCI after identifying a series of such provisions vesting discretionary powers had given concrete proposals to safeguard the interest of the taxpayers against the misuse of discretionary
powers.
Regarding discretionary powers of conducting multiple audits / Amendment of Assessment under Sections 177, 214C and 122of Income Tax Ordinance, they elaborated, “Although a return filed, U/S 114 of ITO 2001, within time limit does qualify for Universal Self-Assessment
Scheme (USAS) and considered to be Assessment Order deemed to have been passed U/S 120(1) of the Ordinance on the date of filing the return, but even then it may be amended as many times as may be necessary by the Inland Revenue officials within 5 years from the end of the financial year in which the return is filed which results in multiple tax assessments”.
They therefore, proposed that the power to select the return of income may rest only with the FBR which held powers to select the audit cases randomly through Computer U/S 214C of the Ordinance.
However, they added, “In case where definite evidence is available with the department then the audit be initiated up to the transaction in question only”.
These discretionary powers provide sufficient incentives to the Inland Revenue Officials to serve Audit Notices to
the commercial importers and other such assessees who have already discharged their tax liability as full and final at the time of clearance of goods at customs stage and as such promote direct contact between a taxpayer and tax officials which is against the government policy as it encourage tax evasion and corruption.
They also lamented posting of Inland Revenue Officer at Business Premises under Section 40B of Sales Tax Act, 1990 to monitor production, sales of goods, stock position etc as it is out dated and unnecessary in the modern era of computerization and available methods
of monitoring the entire production and supply chain. He argued, “It gives a perception of anti-business and anti-investment government policies, creates harassment and tantamount to revival of supervise clearance scheme of Central Excise in Sales Tax Act, 1990”.
