The Federal Board of Revenue (FBR) may make it mandatory for the taxpayers to pay some amount of the disputed taxes in advance for resolution of tax disputes under the Alternative Dispute Resolution (ADR) mechanism. Sources told Business Recorder on Thursday that the issue would be taken up in the next board-in-council meeting of the FBR.
It has been proposed that the applicant, who files ADR application, should pay some percentage of the due amount for taking up his case in the ADRC. However, the final decision would be taken in the next board meeting. When contacted, tax consultants said that any proposal to collect fee on the alternative dispute resolution would have direct negative impact on the ADR mechanism.
It would discourage taxpayers from going into the forum of the ADR for resolution of tax disputes. Globally, there is no fee on tax dispute resolution any where in the world. The ADR is a kind of appellate forum where fee/amount could not be collected from the applicant.
When the tax department charged 15 percent fee of the total demand on filing of "first level of appeal" by the taxpayer, people started going to courts. This 15 percent fee on first level of appeal was abolished after its implementation within one year, tax advisors added.
Meanwhile, the FBR has decided to consult Overseas Investors Chamber of Commerce and Industry (OICCI), Institute of Chartered Accountant of Pakistan (ICAP) and Federation of Pakistan Chamber of Commerce and Industry (FPCCI) to appoint fresh panels of ADR committees to settle tax disputes of the business community. In this connection, tax authorities would take the matter of fresh ADR panels with the OCCI, ICAP and FPCCI to expedite clearance of tax-dispute cases filed by the registered taxpayers.
It has also been decided that the panel of ADRC members would be increased by including those professionals having good reputation in the market. It has also been decided to pay some honorarium to the ADRC members. The FBR would amend the tax laws for giving honorarium to the ADRC members, if required. Sources said that the board is already examining a proposal to prescribe a time limit, of one month to finalise recommendations of the ADRC.
According to sources, the FBR has observed that ADRC's recommendations were pending in various cases on taxation matters involving substantial revenue. To effectively resolve the disputes on taxation matters, the FBR has finalised a set of measures to expedite clearance of pending ADRC cases. The FBR has decided that concerned members should pursue the matter with ADRC for early decision, or set up ADRC where applications had been received.