ISLAMABAD: Finance Minister Shaukat Tarin Wednesday assured the Senate Standing Committee on Finance that the text of the Section 203A (powers to arrest) of the Income Tax Ordinance 2001 will be changed by rewriting the section and all objectionable things will be removed.

On Wednesday, the finance minister informed the committee about the newly-proposed provision pertaining to the arrests of persons introduced in the income tax law through Finance Bill 2021.

The Senate Standing Committee on Finance has already, unanimously, turned down the proposed changes in the income tax law that allows the Federal Board of Revenue (FBR) to arrest and prosecute any person on suspicion of concealment of income.

The committee members opposed the provision and unanimously rejected Section 203A (Power to arrest and prosecute) in the Income Tax Ordinance, 2001.

Through the Finance Bill 2021, the FBR has proposed Section 203A (Power to arrest and prosecute) in the Income Tax Ordinance, 2001.

The finance minister stated, "We will rewrite this section and all these things will be removed".

The minister assured the committee that decision to arrest anybody would not be taken at the level of the Federal Board of Revenue (FBR) but at the finance minister’s level after threadbare discussion following third-party audit.

People have to pay taxes and the willful defaulter has to face arrest as well.

The minister said that the law minister had already been told to change the text of the law and he would do so in couple of days.

“You can give me recommendations to change the text,” the minister offered the committee members and stated that it would be more appropriate, if the committee suggests changes in 203-A and he would be ready to accept them.

The minister said that the purpose to introduce this clause was to create deterrence that anybody who is not paying taxes can be caught.

He said that the government now had 7.2 million people profile on the basis of their consumption pattern.

We will gradually bring them into the tax net, he further stated.

There is a reputation of harassment by the FBR and we decided to have third-party audit to minimise the role of the FBR.

The minister said that the text of section 203-A in the current shape was not in conformity with the government policy of making the tax system harassment free.

Copyright Business Recorder, 2021