FBR overburdens LTOs by clubbing medium and large manufacturers together

LAHORE: The Federal Board of Revenue (FBR) has overburdened Large Taxpayer Offices (LTOs) by combining medium size manufacturers with the larger ones to streamline their revenues, said reliable sources.

“The present regime has made a policy-shift and added some 30 to 40 medium size manufacturers and sub-sectors to the LTOs from Regional Tax Offices (RTOs) countrywide to harmonize their collections and data vigilance without meeting shortage of staff,” they said.

According to them, the overall number of taxpayers at the LTO Lahore has been almost doubled to 2,067 from 1,200 in August 2020, when the present Chairman of the Board introduced this shift in policy as Member Inland Revenue Operations.

Later, he was appointed as Chairman of the Board. It may be noted that the LTOs are collecting 80 percent of the overall revenue for the Board, as the monthly revenue generation target of LTOs is already exceeding continuously.

This workload has aggravated further with the posting of majority of support staff to sugar mills under section 40B of Sales Tax Act to monitor production and stocking of sugar.

Accordingly, the work of relevant officers has become cumbersome as if they were taking a month to scrutinize a turnover of one billion rupees; the present workload was consuming more time to carry out audit of billions of rupees turnover.

“Since the Board has enhanced jurisdictions of each officer without providing support staff, therefore, a popular trend of litigation on the part of medium size manufacturers has added to their workload,” said an officer requesting anonymity.

He said the timelines for the audit of their sales are also very limited while the Board desires blanket audit of combined years instead of focusing on the risk-based years. The desks of LTO Lahore are full of files while the chairs of support staff are lying empty at present.

It may be noted that more than 80 percent taxpayers in RTOs are small and medium sized manufacturers. The RTOs are focused on tax broadening and compliance through filing of returns while the Corporate Tax Offices (CTOs) are focused on encouraging taxation in the corporate sector.

Copyright Business Recorder, 2021