Alleged maladministration by FBR officials: FTO authorised to initiate ‘suo motu investigation’: President

ISLAMABAD: President Arif Alvi has declared that the Federal Tax Ombudsman (FTO) is fully authorised to initiate “Suo Motu Investigation” for any alleged maladministration committed by the Federal Board of Revenue (FBR) officials.

The president rejected six representations filed by the FBR against the order of the FTO.

The President has endorsed the order of the FTO for conducting investigation against the tax officials of the FBR.

The FTO had directed the FBR to conduct inspection in the subject 06 cases to ensure that action is initiated & concluded as per information provided by FTO during instant investigations.

President endorses FTO’s order against FBR

The Chief Commissioner LTO Islamabad should identify the officers who are responsible for unwarranted delay and resultant loss of revenue.

The said Own Motion investigations were because FTO Secretariat has evidence-based information that some of the most meaningful and innovative initiatives of FBR’s own officers and field formations stand diluted and washed away due to follow up failure, frequent posting transfers of officers and massive changes of jurisdictions.

Moreover, through In-House Analysis FTO Secretariat has also identified that though FBR and its dozens of field formations maintain an organized web portal, rich data centre, exhaustive Data Bases, elaborate and comprehensive operational soft wares and houses a full-fledged & home-grown IT support system i.e., Pakistan Automation (PVT) LTD (PRAL), yet neither FBR HQs nor its any single field formation maintains any IT based tracking system, archiving various valuable initiatives & ventures made by different FBR’s organisations, officers, teams or specially created cells from time to time.

Therefore, it was reasonably assumed that in most of the cases the good job done is wasted, diluted or compromised with the transfer of individuals, dissolution of units/cells and take over by new managers.

While conducting the aforesaid In-House Analysis FTO Secretariat has information on record that a list of potential cases of tax evasion, (including the aforementioned 06 cases) along with detailed Investigation Report & Case Study was prepared & shared by Directorate General (DG), broadening the tax base (BTB) FBR. This valuable information was duly shared in December, 2018, with the concerned field formations for-taking action against said entities for not declaring true particulars of their receipts/income and not discharging their responsibilities as withholding agents. However, in 2019, FBR’s management suddenly shelved this whole BTB regime overnight disbanding BTB Zones Islamabad, Lahore and Karachi. Office of DG BTB was relegated to a ceremonial entity assigned as additional charge. Thus, in addition to losing an effective organization, the repository of the whole above data/information was suddenly rendered extinct.

Such a kneejerk attitude of FBR’s reflects clear maladministration i.e. neglect, inattention, delay, incompetence, inefficiency and ineptitude, in the administration or discharge of duties and responsibilities.

FTO’s in-house analysis was mainly based on investigation reports generated by DG BTB which clearly shows that the above concerns were not declaring the true particulars of Income and were not discharging their responsibilities as withholding agents.

In order to make out foolproof cases, the total receipts of the said companies were obtained by DG BTB from the data hosted by international Aid Transparency Initiative, which was compared with the declared receipts in the tax returns. Huge discrepancies were observed casting doubt about tax evasion by the above companies.

A detailed analysis was provided to the department discussing parameters and extent of tax evasion. However, after disbanding of the BTB office, progress on this case was not known. It seems that the valuable information shared with the field formations was lost due to inattention, incompetence and ineptitude of the officers holding jurisdiction of this case.

The President ruled that the FTO was fully authorised to initiate Suo Motu Investigation for any alleged maladministration on the part of the Revenue Division or any Tax employee. Thus, the department’s objection is untenable.

Hence, FBR is to submit a holistic report in this regard to the FTO’s Secretariat within 90 days positively explaining its stance.

The President said the statutory body was duty bound under the law to perform its functions/duties in accordance with law. It has been observed that action regarding identification of responsible officer, if required, had been left to be taken by the Department itself. Needless to mention that in case any departmental action is proposed against any official, he/she will be afforded due opportunity of explaining reasons and defence to satisfy the requirement of due prod natural justice. Thus, in the circumstances of the case, the representations are liable to be disposed of accordingly, President’s order maintained.

Accordingly, the President, as per his decision, has to dispose of the representations of FBR, the President order added.

Copyright Business Recorder, 2023