Despite having the deadline of December 31, 2010 for recovering unpaid direct taxes amounting to Rs 92.26 billion, the Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) have so far appeared feckless as majority of cases are in litigation, Business Recorder learnt on Monday.
According to sources, the member policy (direct taxes) of Federal Board of Revenue (FBR) had directed all LTUs and RTOs to recover at least 50 percent of the arrears on direct taxes by December 31, 2010. They said the decision, which was made at chief commissioner conference held at Islamabad on September 27, 2010 to achieve the half-yearly revenue target, is unlikely to be successful as all LTUs and RTOs have shown their inability in this matter.
They further said the tax departments in this regard have sent letters to the board, intimating about their inability to comply its said instruction as majority of potential cases are pending in the courts. When contacted, official sources in Karachi LTU, they said that although the FBR has directed to recover 50 percent of arrears by December 31, 2010, the department could not expand its recovery exercise as the apex body had issued stay orders in many cases.
They informed that the receivables of Karachi LTU is now stood at Rs 21 billion, of which, only Rs 1 billion is recoverable while remaining receivables are sub judice. On the other hand, the field formations have also been restricted to take stern punitive measures against the defaulters without prior approval of board, which is not only creating hurdles for enforcement department but also promoting non-compliance culture among taxpayers, they lamented.
Similarly, the Chief Commissioner, Karachi RTO, Imtiaz Ahmad Barakzai also termed the recovery of arrears by the said deadline as formidable task. He further said that the Karachi RTO is striving to produce prolific results in this connection, albeit numerous cases are pending in the courts.