LAHORE: A leading dairy company has no option but to withhold staff salary to pay tax against a coercive demand raised by the Large Tax Office (LTO) Lahore, said reliable sources.
They said the dairy company was forced to pay tax demand in advance in follow up of the audit carried out by the LTO. It is high time to milk the taxpayers in the shape of advance tax to meet abnormal revenue targets set by the Federal Board of Revenue (FBR), they added.
Accordingly, they said, fake tax demands are being raised at a supersonic speed at present. The gravity of situation could be judged from the fact that another corporate firm has pointed out in its reply against a notice that the LTO was raising demands with ‘mala fide intention’, as the company has already convinced the LTO twice against similar notices in the past.
Similarly, sources in the Corporate Tax Office (CTO) Lahore told this scribe that tax demand of Rs 234 million has been raised against a glass sector firm. In total, they said, the CTO Lahore has raised Rs1000 million demands in the month of March.
It may be noted that presidents of various chambers of commerce & industry as well chairmen of different associations have brought to the notice of the Federal Tax Ombudsman (FTO) the ongoing practice of creating fake demands to collects taxes coercively by the field formations of the Board. They said the practice has become popular in the Board over the last two years and the staff at the field formations is higher disturbed over the constant pressure being exerted by the Board in this regard. A large number of tax officers are opting for other options to come out of the pressure.
The sources said the Board was more anxious about the gap in revenue collection, which is being met through desk audits to generate fake demands. They said the officers in the LTO are not allowed to extend any favor to the large taxpayers despite reconciliation of data. However, the tax officers in CTO are not facing any such pressure and they can freely extend a favor to relatively small taxpayers after data reconciliation, they added.
According to the sources, the number of notices issued against fake demands has surpassed past records by all means. Earlier, they said, there was a practice to extend the opportunity of reconciliation of data to the taxpayers and notices were issued only if the taxpayer was unable to satisfy. But the Board was forcing to issue notices directly to taxpayers without providing them this opportunity now, followed by a decision within 120 days, they said and pointed out the only positive side of the situation is that no such notice is issued without invoking the legal provisions relating to audit.
It may be noted that the forum of Alternate Dispute Resolution Committee (ADRC) under section 33 of the Income Tax Ordinance has become redundant and the number of pending cases has multiplied many times.
Copyright Business Recorder, 2022