ISLAMABAD: Amid uproar and walkouts by Pakistan Tehreek-e-Insaf (PTI)-backed Sunni Ittehad Council (SIC) lawmakers, the government on Monday passed the Tax Law (Amendment) Bill, 2024, aimed at bringing reforms to the tax tribunals.
The Minister for Parliamentary Affairs Azam Nazeer Tarar laid the bill – the Tax Law (Amendment) Bill, 2024 – to further amend certain tax laws, which was subsequently passed by the house after incorporating some amendments proposed by the Senate and two lawmakers – Zeb Jaffer and Aqeel Malik – belonging to the ruling Pakistan Muslim League-Nawaz (PML-N).
According to the statement of objects and reasons, the bill is aimed at “giving legislative effect to the taxation proposals of the federal government to liquidate a significant number of appeals before commissioner Inland Revenue (Appeals) and appellate tribunals as Appellate Tribunal Inland Revenue (ATIR) is the last fact-finding authority in the appellate hierarchy provided in fiscal statutes”.
“Over the years and for various reasons including arbitrary constitution of benches inadequate benches, delay in fixation of benches and disposal of appeals, a substantial amount of revenue, to the tune of Rs2 trillion is held up in litigation before ATIR,” it added. The minister said that the bill is about reform of tax tribunals as around Rs27,000 billion in tax-related cases are pending at the level of Commissioner Inland Revenue (Appeals) across the country.
The number of cases is increasing with each passing day due to which, he added, the legislation is being done after holding multiple meetings with all stakeholders.
“Some basic reforms have been proposed in some of the laws, for instance, for basic assessment, all the litigants used to approach commissioner Inland Revenue, followed by tribunals and high courts,” he added.
“There was no fixed time to dispose of the cases. Through amendments in the law, liabilities up to Rs20 million will be appealed at the commissioner level and cases above Rs20 million can be appealed before Inland Revenue tribunals, and the appeals of both these streams will go to the high courts in the form of a reference”.
Before the amendment to the law, he added, “a reference was being filed in high court on the question of law, but now it has been amended and the case can be argued on mixed question of law and facts”, adding, “With the decree from the tribunal, the recovery process used to start with a 90- day reference in high court, which was quite cumbersome, and Federal Board of Revenue (FBR)was immediately withdrawing money from the account”.
“With this amendment, now there will be 30 days […] during this period, there will be no recovery until the passage of 30 days,” he added.
He said that the appointment of the tribunals’ judicial members was the prerogative of the prime minister, and now he had forgone his powers and placed it on an open competition.
The minister said that independent testing agencies may that be the Institute of Business Administration (IBA), Lahore University of Management Sciences (LUMS) or any other reputable institution, will conduct a written examination from the members and there will be a selection committee headed by a pensioned judge of the Supreme Court comparing Pakistan Tax bar representatives.
He maintained that these are the basic amendments through which, “we are trying to ensure financial recoveries to be taxpayer-friendly, involving mediation besides binding the state-owned companies to approach Alternate Dispute Resolution (ADR) first and then file the case as most of the litigations are among government departments.
“This is aimed at improving the economic health of the country’s fragile economy, which you had referred to the Senate, on which, the chairman Senate constituted a special committee comprising Ali Zafar and Farooq Naek, and I also assisted them,” he added.
The minister out-rightly rejected the opposition’s demand to refer the bill to the House standing committee on finance, which is yet to be formed.
The opposition leader in the National Assembly Omar Ayub said that the matter involves taxation and it should be debated in the House Committee on Finance.
However, the minister said that the bill had been shared with the members, and it was not his fault if they had no time to go through it. With this, the PTI lawmakers pointed out the quorum and staged a walkout after the NA Speaker Ayaz Sadiq announced the house was in order following a headcount and proceeded with the legislation.
The minister also laid the Seed (Amendment) Ordinance, 2024, before the house.
The house was prorogued sine die.
Copyright Business Recorder, 2024
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