Federal Tax Ombudsman (FTO) is investigating whether mal-administration of tax machinery, incompetence and inefficiency of Inland Revenue Service (IRS) officers in field formations, is a major hurdle in smooth implementation of Voluntary Tax Compliance in Pakistan.
It is reliably learnt that the FTO has taken up a serious complaint of an employee of International Embassy, whose bank account was attached without serving any statutory notice and illegal recovery was made by IRS officers in Lahore, reflecting a clear case of harassment and mal-administration. The FTO has started investigation on the complaint filed before the FTO through Lahore based lawyer Waheed Shahzad Butt.
The complainant has highly appreciated and highlighted ongoing efforts made by Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue to broadening the tax base. At the same time, the case also reflected that how the field officers make illegal recovery of taxes without following laid down procedure for passing of assessment order and by attaching bank accounts of salaried taxpayers. It is alleged that such kind of illegal actions of the IRS officers in the field formations are major hurdles in smooth implementation of tax compliance on voluntary basis by the new taxpayers.
Details revealed that the FTO is investigating the issue of main hurdle against Voluntary Tax Compliance due to mal-administration of justice, neglect, inattention, delay, incompetence, inefficiency and ineptitude in the administration/discharge of duties and responsibilities by the FBR field officials for passing patently illegal orders and recovery through attachment of bank accounts.
The complainant states, "SA to PM's untiring and FBR's joint, broadening of tax base and Voluntary Tax Compliance (VTC), campaign aiming at an enhanced Tax-GDP ratio is rightly being portrayed as the real panacea for all the economic and fiscal ills our country is facing today but the ground realities on the part of some IRS functionaries reflects quite strange picture. Broadening of tax base and VTC exercise is not the first of the sort in FBR's long history, therefore, the previous such exercises as well as present casual non-professional attitude on the part of some rogue IRS officials need to be analysed, so as to ascertain that why and how IRS authorities could not convert this long cherished dream into a reality.
Present complaint is a tip of the iceberg to highlight what is going on inside IRS and what is the price of paying tax voluntarily. On 02-11-2015 the complainant was informed by his bank that IRS officials of RTO, Lahore have issued notice for recovery of income tax demand created against the complainant under Section 122C of the Income Tax Ordinance.
In the patently illegal assessment order, no reference of addition in any property/business/asset is shown/confronted by the most vigilant and leaned DCIR. On the basis of aforementioned patently illegal order concerned ACIR, issued a combined notice for 15 persons to the SCB, wherein salary of the Complainant has been transferred by the employer. Prior to initiation of such harsh action no intimation/notice was ever issued to the Complainant by any of the IRS functionary: Complainant stated.
The complainant further stated "As a result of illegal recovery move, a sum of Rs 195529 was snatched/robbed through Pay Order. After picking all documents including patently illegal order from tax office and recovery notice from the bank, complainant through his counsel electronically submitted income tax return, wealth statement and reconciliation statement and requested for withdrawal of illegal notice/order duly submitted at Taxpayers Facilitation Division, Regional Tax Office. On silence from FBR functionaries another written request was moved but all in vain. Finally, a representation/complaint/request was moved to CIR but as usual no response from either end. Quite surprisingly not a single notice u/s 122C/114/111 of the Ordinance has been issued / served by the FBR functionaries before passing patently illegal order and before snatching/robbing funds from SCB. This state of affairs reflects nothing but severe mal-administration of justice.
The FTO is required by the terms of the statute that governs the working of the office of the FTO to unmask maladministration and recommend action to prevent its recurrence and this is exactly what the FTO has done. It would be a gross dereliction by the FTO if he was to turn a blind eye to the FBR's illegal, mala-fide or outright incompetent machinations to tamper with the tax liability of a person without fulfilling the statutory obligations under the law and applying the fiscal statutes in its true letter and spirit, the complainant added.
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