Federal Tax Ombudsman retired Justice Saleem Akhtar has said he would recommend review of Section 9 (2) B of the Federal Tax Ombudsman Ordinance as the implications of its interpretation have defeated the purpose of the law. He was talking to the editorial board of Business Recorder on Wednesday.
Justice Akhtar said that the main purpose of the Ordinance was to provide relief to aggrieved parties arising out of issues of maladministration such as misuse of authority, arbitrary exercise of power and host of other related matters.
He said that once the Ombudsman was deprived of his jurisdiction to look into "these affairs" the purpose of the law would stand defeated.
He said: "Section 9(2) B frustrates the objectives of the entire ombudsman's office and the law under which this office has to operate.
It is a poorly drafted provision that needs rethinking and review, as the matters that would come to the ombudsman would in one way or the other relate to valuation, assessment and which would also be appealable.
If these issues are not to be addressed by the FTO, then the purpose of the law is defeated. Lawyers and members of the business community have also agitated against this very nature of section 9(2) B. It is contrary to the spirit of the office of the Ombudsman."
He said he had explained the sensitivity and nature of section 9(2) B to the president of Pakistan during the presentation of FTO's annual report 2002 in May last.
The matter was referred to the ministries of law and finance to study the irritants. "What has happened to that reference, I do not know," he added.
The Ombudsman, who will be completing his fourth year in office in September this year, has so far disposed of more than 4000 applications.
Out of this number, only about 300 to 400 of his findings and recommendations were referred to the president, through the Central Board of Revenue, for review. Decisions on some of the appeals are still pending.
Under the original law, upon filing of an appeal before the president, a status quo was to be maintained.
However, later, this provision has been amended that holds the FTO's findings in abeyance till the disposal of the appeal. He said that all the decisions of the Ombudsman were legally binding on concerned individuals/organisations/institutions. The Central Board of Revenue is bound by the Ordinance to implement the findings of the Ombudsman and also to ensure that its subordinate offices do not flout it.
Justice Akhtar said that improvement in the tax organisation would neither be possible through changes in law, restructuring of the organisation nor initiating punitive actions against the errant tax payer or the tax collector. "What we need is a change in attitudes and perceptions towards our taxation and revenue collection problems.
A different mindset is needed to set in changes in the tax administration system. Laws will not, but mindset will bring improvement."
He gave an overview of the functioning and achievements of the office of the Ombudsman and said that it had its impact on all the tax levying and collecting system.
"Major problem is that laws are not being implemented in true spirit. No one knows when the CBR will monitor tax collection, set aside order of the subordinate offices, refund excess collection and take such action that law provides in the interest of taxpayers.
No one knows when and at what time a particular action would be taken," Justice Akhtar said and added that this culture should be changed.
The Ombudsman said that the CBR had to do a lot in the sphere of record keeping. Proper record keeping and strict adherence to tax laws would reduce number of cases that were coming to the Ombudsman, he added.
Counting some of the areas of weaknesses of the CBR, which result in the loss of information, the Ombudsman said, "Proper entries of payments and challans remain missing, proper ledgerisation is not there, proper entry of documents is still not assigned any importance.
In many cases a wild guess is the only answer to many questions, at times laws of assessment are not properly understood and applied, foul play in the handling of challans is a common and frequent complaint besides other irregularities." Proper maintenance of record was necessary for tax administration, he said.
He said that there was need to streamline the data collection and registration system. "More than 60 to 65 percent revenue comes in the form of withholding tax. Many withholders of WT do not deposit it. The government is the loser in the case and the assessee sufferer."
He said: "Automation should bring improvement in record keeping; and, perhaps outsourcing of data maintenance work may be one of the answers."
Justice Akhtar said that the institution of Ombudsman needed further strengthening through the support of all the stakeholders.
This can be very effective in motivating people to pay tax and feel secure later on.
He said that the institution of Ombudsman had established itself on firm footings and set traditions of disposing of cases strictly according to laws and given time framework. It should now be taken ahead.
He said that the business and trade community had welcomed the institution of Ombudsman and would like its continuation.
"It has brought them relief and saved them from hardships," he said and added that the Ministry of Finance and the Central Board of Revenue were also the beneficiaries.
S.A. Nasser, adviser to the Ombudsman, who was also present, explained the working of the office and listed a number of areas that had remained touchy for a longtime.
Nasser said that the institution of Tax Ombudsman had come as a new concept for the people, who had questions about its effectiveness. The performance of the FTO had already answered all questions and it was time to consolidate its gains.
Comments
Comments are closed.