ISLAMABAD: Senior Pakistan Peoples Party (PPP) leader and former federal finance minister Naveed Qamar on Wednesday said the federal government has no authority to hold provinces accountable on spending money under the National Finance Commission (NFC) Award.

Chairing a meeting of the sub-committee of the Public Accounts Committee (PAC), Qamar said it was a violation of the constitution that the federal government would ask the provincial governments on utilisation of funds and other matters.

“Under the constitution, federal government’s status is a unit and provinces are also independent units, therefore, it can’t interfere in utilization of funds by provinces,” he observed.

He maintained that a forum of the Council of Common Interests (CCI) was established to resolve disputes among provincial governments and the federal government.

In a briefing on Cabinet, Information Minister Shibli Faraz announced on Tuesday that the federal government will seek to improve the mechanism an funds distribution under the NFC Award in order to hold the provinces accountable for how they spend the money.

The committee examined Audit Report 2016-17 on the Federal Board of Revenue (Inland Revenue), and extended 45 days to either recover outstanding taxes in various cases or reconcile billions of rupees with the Auditor General of Pakistan (AGP).

In a self-assessment scheme of the FBR, the audit officials, unearthed Rs7.3 billion loss of tax due to incorrect adjustment of brought forward losses.

Section 57 of the Income Tax Ordinance, 2001 provides that if a taxpayer sustained a loss in business for a tax year, the loss would be carried forward to the six following tax years and would be adjusted only against profit and gains of such business.

In particular case, income of 13 taxpayers was assessed at loss.

These losses were either assessed incorrectly or carried forward erroneously and set off against business income beyond the prescribed limited.

An official of the FBR informed the committee that the amount would only be recoverable when an audit would be held by the FBR or other agency as the FBR could not take action against the taxpayers who declared their assets under self-assessment scheme.

In another case, the audit pointed out short levy of supper tax for rehabilitation of temporarily displaced persons of an amount of Rs6.2 billion.

The committee was apprised that out of total, Rs2.7 billion was recoverable and Rs528 million was stuck in various cases pending in the courts of law.

Copyright Business Recorder, 2020