The institution of Federal Tax Ombudsman was established in 2000 and has not yet completed six years of its life. In the past, several institutions were created to oversee the functioning of the government departments and agencies with a view to looking after the welfare of the citizens, preventing executive excesses and taking steps to improve the quality of governance.
The institution of Wafaqi Mohtasib was established for the same purpose ie to redress the growing grievances of the public against the government departments. It was also felt that the existing government machinery, courts, tribunals and administrative agencies did not adequately and expeditiously address the growing challenges of public service and did not meet the demands of the society.
It may be interesting to note that the institutions of Ombudsman have been established throughout the civilised world to oversee the civil bureaucracy with an independent, impartial and fair attitude and established a credible procedure to provide easy access to the complainants to redress their grievances.
It was, however, felt that with the complexity of work assigned to the tax departments and the seriousness of the problems faced by the people in tax matters, there was need to establish a separate office dealing only with federal tax matters ie grievances concerning the federal taxes such as income tax, customs, central excises (now known as federal excise), wealth tax and sales tax.
It was thought appropriate that protection be provided to the public against executive and administrative mistakes, excesses and abuse of power by the tax departments. The proposal for establishing a separate and independent institution to deal with the tax complaints was repeatedly made. The establishment of Federal Tax Ombudsman's Office in August 2000 was in response to this long-felt need.
The basic idea behind establishing this institution is to enforce accountability, transparency and justice and, as an external and independent agency, objectively investigate the cases of maladministration and recommend steps to reduce and eliminate them.
The role of this office is to diagnose, investigate and pinpoint the maladies, shortcomings, problems and malpractices and provide a forum to the aggrieved public for quick and inexpensive remedy.
The office of the Federal Tax Ombudsman was established through an Ordinance in August 2000 and my able predecessor Justice Saleem Akhtar built the institution on a sound footing in a brief period.
Under his dynamic stewardship its Secretariat was established in Islamabad and regional secretariats were established in Lahore and Karachi. It goes to the lasting credit of Justice Saleem Akhtar that the impact of the establishment of this tax Ombudsman was immediately felt by all concerned circles, particularly the taxpayers, whose grievances against the tax departments must be well known to you.
I may add that the members of the Tax Bar Association have ably assisted this office in examining the complaints of the taxpayers and their contribution in deciding the cases brought to our notice has been hugely valuable. The investigations of this institution and its recommendations and decisions have been widely published in the newspapers and law journals.
It is, however, felt that there is still need for creating greater awareness of the role of this office and create greater confidence the minds of the taxpayers to assert their rights and firmly stand against the injustice, illegalities and violation of their legal rights.
I would take this opportunity to briefly state that the functions and jurisdiction of the Federal Tax Ombudsman empower him to diagnose, investigate, redress and rectify any injustice done to a person by the Departments of Income Tax, Sales Tax, Customs, Federal Excise, Wealth Tax and prevention of smuggling.
The scope of maladministration has been elaborately defined in the Ordinance to include a decision, process, recommendation which is contrary to law, arbitrary or unreasonable, oppressive and unjust and exercise of excessive power or failure to provide service for improper motives.
It also includes repeated notices, unnecessary attendance or prolonged hearings before deciding the cases by the tax authorities. We also take notice of wilful error in determination of refunds and rebates, coercive method of recovery and avoidance of disciplinary action against officials whose orders of assessment or valuation have been held to be vindictive or patently illegal.
The process of making complaint on allegations of maladministration is simple. After obtaining the response from the department on each complaint and hearing both sides, decisions/findings are given.
Although the decision of Federal Tax Ombudsman has been termed as recommendation, it carries the weight of a decision, order or judgement to be complied with within a fixed time.
Under Section 12 of the Ordinance it is the duty of the Revenue Division and tax employees to implement the findings made by the Federal Tax Ombudsman.
I take this opportunity to inform you that during the period of less than six years since its establishment, 7725 complaints have been filed by the aggrieved taxpayers out of which 7439 have been disposed of and only 286 complaints were in process at the end of February 2006.
Additionally, 613 review applications were filed during this period by the taxpayers as well as the Revenue Division and 593 applications were disposed of till end of February 2006, leaving only 20 review applications in process.
Most of the complaints made to this office involve complicated tax problems regarding legal disagreements, statistics of revenue, assessments, refunds and rebates, and, in a large number of cases, non-availability of records has been discovered as the main source of irritants for the taxpayers.
Each complaint is thoroughly examined and all facts and arguments for and against of both the sides are keenly examined and scrutinised. It is our endeavour to provide inexpensive and quick relief to the people who received a raw deal at the hands of the tax collectors.
Special care has been taken to ensure timely implementation of the findings made by this office and the Ordinance has incorporated a comprehensive mechanism for enforcing the decisions. If the department falls to implement a recommendation, the Ombudsman may refer the matter to the President who may in his discretion direct the Revenue Division to implement the recommendation.
Where compliance is not made, action for defiance can be initiated against the department or the tax employee who is also liable for contempt.
A strong monitoring mechanism for implementation of the recommendations is in place and functioning efficiently. I may add that the keen co-operation of the CBR has also greatly contributed in smooth pursuant of our endeavour to deliver justice to the aggrieved taxpayers.
With the active co-operation of the CBR, the pace of implementation of the decisions of the Tax Ombudsman has remained satisfactory and there is little possibility for the tax employees to ignore or avoid the decisions of this office in respect of the grievances brought to our notice.
I hope that the members of Karachi Tax Bar would expand and deepen their relationship with the institution of Federal Tax Ombudsman, appropriately advise the taxpayers how to seek relief of their perceived grievances by coming forward to this institution, and making their valuable contribution in assisting the institution to arrive at just decisions in accordance with the tax laws.
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