FBR barred from issuance of manual notices: President endorses decision of FTO

ISLAMABAD: The president has endorsed a major decision of the Federal Tax Ombudsman (FTO) to bar the Federal Board of Revenue (FBR) from issuance of manual notices and directed that only bar-coded notices be issued to the taxpayers.

According to the details of the President’s decision issued on Tuesday, an own motion investigation was initiated under section 9 (1) of the FTO Ordinance, 2000 regarding procedural loopholes in the sales tax/FED regime.

The FTO had observed that Inland Revenue officers were issuing manual show cause notices, which were at times scrapped as a result of illegal settlement with the taxpayers. This practice was facilitated by the procedural shortcomings as the FBR had failed to introduce Bar Coded and System Generated Notices Regime under the Act.

Neither any uniform pattern of system generated notices of the FBR’s portal was being used, nor SCNs were being issued in all types of audit cases. The show cause notices were issued through Tax Audit Management System in one category of audit. But in cases of regular audit, approved by the Commissioner, such notices were being issued manually.

It was also observed that due to systemic maladministration, the show cause notices in certain cases were being misused for corrupt or improver motives falling within the ambit of maladministration.

FTO, Dr Asif Jah, directed the FBR to address all inconsistencies, procedural loopholes and systemic flaws through an integrated FBR portal i.e. IRIS. All standalone systems/softwares/modules/applications may be configured in single IRIS portal.

The FTO, further directed the FBR to implement E-solution on a priority basis and direct field officers to ensure issuance of bar-coded notices, so as to avoid misuse of powers by the tax functionaries.

The FBR filed a representation before the president of Pakistan against the above recommendations. The president; however, rejected the FBR’s appeal and held that the FTO’s direction to remove inconsistencies, loopholes, and flaws and implement E-solutions were strictly within the powers conferred under the FTO Ordinance,2000.

Copyright Business Recorder, 2022