The Large Taxpayer Unit (LTU) at Karachi has sought sufficient financial and administrative autonomy from the Federal Board of Revenue (FBR) to independently deal with the shortage of sales tax officials, non-availability of IT equipment and other serious problems which the largest taxpaying companies in Karachi are confronted with.
Sources told Business Recorder on Tuesday that the administrative and statutory autonomy granted to the collectors under Sales Tax Act, 1990 and Federal Excise Act, 2005 is not enough to deal with the administrative issues of the LTU. Sales Tax Act and Federal Excise Act do not support the administrative schemes of the LTUs. This has resulted in delays to take decisions on allocation of places for officials, placement of record/equipment, taxpayer's initiatives and other administrative problems encountered in smooth functioning of sales tax and federal excise wings.
According to sources, the Karachi LTU is facing many problems, including shortage of officers/staff, non-availability of upgraded IT equipment, inadequacy of office space, transportation, delegation of financial powers to meet day-to-day contingency issues and maintenance of parity.
Sources said that the creation of LTUs was a historic step towards facilitation of large taxpayer on modern lines. The heads of LTUs including collectors and commissioners do not enjoy the financial powers making contingency expenditure. This causes great hindrance in smooth functioning and administrative control of collectors and commissioners who require either at least authorisation of utilising budget at their disposal for meeting day to day requirements.
The LTU has requested the FBR to either delegate financial powers under revised Financial Rules 2006 to all divisional heads where collectors are entitled to exercise financial power up to the limit of Rs 500,000.
It is not clear whether the FBR Act 2007 has any provision to delegate financial powers to the head of LTUs or not. The government has issued FBR Rules 2007 along with notifications to enforce FBR Act, 2007 and extended powers of the members for carrying out day to day operations of the revamped organisation.
Under the new Federal Board of Revenue Rules 2007, the board has delegated its powers and functions to the Chairman or the line Members, functional Members and support Members who shall transact such business, and exercise such powers and functions, singly, as may be allocated to him.
If the FBR has no provision to extend financial and administrative powers to its subordinate departments like LTUs, it is not clear how the new FBR Act 2007 was implemented without considering this important provision under reforms.
The Karachi LTU has said that most of its staff, like senior auditors, superintendents etc, were borrowed from the Sales Tax House, Karachi, on temporary basis. Due to ad hoc arrangement, these officers are not ready to perform with full dedication and discipline.
Sources said that sales tax and federal excise wing of the LTU, Karachi woke on e-portal starting filing of returns, till its process, inclusive sanctioning of refunds. All officials working in LTU, Karachi must be equipped with computers to analyse revenue figures, conduct desk audit and ascertain the profile of each registered person, completion of legal process, However, practically, almost 50 percent of the officials do not have this facility; resultantly, the work is suffering.
Similarly, other office equipment used as support for efficient output like fax machines, photocopiers, printers, UPS etc have not been sufficiently provided to the Sales Tax and Excise wings of LTU. As the LTU, Karachi deals with corporate clients having voluminous data it needs upgradation of the system hardware, software, DSL, etc. The existing slow personal computers and obsolete systems the refund/audit as well as matters relating to litigation work is being delayed. It is, therefore, suggested that at least 40 new with upgraded system PCs, 6 fax machines, 6 printers and 3 photocopiers be provided to the Enforcement/Legal and Audit Divisions of ST & FE Wing of the LTU, Karachi.
Sources said that the LTU, being pioneer in the changed management, ensures compliance of the policies of FBR in letter and spirit. Personal visits are almost avoided and communication with the corporate clients is established through telephone or e-mails. However, most of the officers at LTU have not been provided telephones and intercom connection. It is proposed that all officers from BS 17 to 20 be provided telephone/intercom connections adequately, LTU Karachi added.
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