Transparency International Pakistan has questioned the Federal Board of Revenue (FBR) as to why the tax department is reluctant to collect due taxes on the declared assets of one of the prominent builders in construction industry under the relevant provisions of the Income Tax Ordinance 2001.
Sources told Business Recorder here on Wednesday that the FBR has already turned down a request of Transparency International Pakistan to share asset declaration and tax deduction information of Malik Riaz, of Bahria Town, Rawalpindi, under the provisions of section 216 of the Income Tax Ordinance 2001.
Under section 216, all particulars contained in any statement made, return furnished, or accounts and documents produced; any evidence given, or affidavit or deposition made, in the course of any proceedings; any record of any assessment proceedings or any proceeding relating to the recovery of a demand shall be confidential and no public servant may disclose any such particulars.
In a letter written to FBR Chairman Salman Siddique, Adil Gilani Advisor Transparency International Pakistan has said that TI-Pakistan requested the Chairman of Federal Board of Revenue vide its letter of September 4, 2010 to provide the information with regard to payment of government revenue on Rs 225 billion assets admitted to be owned by the said builder in his interview on CNN on August 31, 2010.
The Transparency International Pakistan had requested the FBR to provide it information on total value of assets of the builder as assessed by FBR in accordance with Income Tax Ordinance 2001, and tax collected. In case the assets of Rs 225 billion have not been declared to FBR in his tax returns of 2009-10, FBR has to take action according to law (to recover the government revenue and penalty if any for evasion of taxes), Transparency International Pakistan letter said.
The FBR did not respond to TI Pakistan's request for eight months, and therefore on April 29, 2011, TI-Pakistan sent a complaint to Federal Tax Ombudsman against FBR, requesting action under the FTO law, Transparency International Pakistan said. Consequently a reply from FBR was received on June 17, 2011 vide letter No C.No 7(20)S.Asst/2010, quoting TI Pakistan's letter dated April 29, 2010, which is as under:
"This is to inform you that the information sought cannot be provided in view of section 216 of the Income Tax Ordinance, 2011." TI-Pakistan does not understand why the FBR is reluctant to perform its mandatory duty, and avoiding to collect the due taxes on the declared assets of the said builder.
TI-Pakistan in its complaint dated 4/9/2010 raised two issues. First one was replied by FBR that under section 216 the tax figures of individuals cannot be provided. However, the second request of TI Pakistan has not been responded to that in case these assets of Rs 225 billion have not been declared to FBR in builder's tax returns of 2009-10, FBR to take action according to law, which means that FBR should recover the outstanding tax and penalty on wilful concealment, TI letter further said.
TI-Pakistan further stated that Pakistan is suffering because of evasion of government revenue by taxpayers, and also due to lack of application of rules, especially by FBR, and TI Pakistan again requests the Chairman FBR to apply the law and recover the outstanding dues if any from the defaulter.
"We again request you to kindly confirm whether Rs 225 billion internationally declared to be owned by the said builder are included in the tax returns of 2009-10 and FBR has collected the due taxes", the letter of Adil, Advisor, TI-Pakistan to FBR Chairman, added.