ISLAMABAD: Federal Tax Ombudsman (FTO) Dr Asif Jah has directed the Federal Board of Revenue (FBR) to refund the excess income tax to all the taxpayers, where tax liability has been computed wrongly for the Tax Year 2023 due to incorrect formula in the new income tax return.

Sources told this correspondent that this landmark order has been issued by the FTO on the basis of a public interest complaint lodged by tax lawyer Waheed Shahzad Butt for pensioners, senior citizens and Shuada family regarding discrepancies in their income tax calculations.

Earlier, FBR has admitted before the FTO that the income tax return devised for Tax Year 2023 is calculating incorrect tax liabilities for pensioners, senior citizens and members of Shuhada families.

Incorrect tax liability: FTO summons FBR officials

FTO order states: “Comments were sought from the Secretary Revenue Division, Islamabad, Member (Policy) and Member (Information & Technology). Masood Akhtar, Chief (ITP) and Abbas Mir, Chief (BDT-IT) from FBR appeared as (Departmental Represen-tatives) and presented department’s stance on the issue.

During the hearing the AR stated that although the department has rectified the calculation mistake in IRIS, yet no exercise has been made by them to ascertain how much excess amount has been paid by the taxpayers, who filed returns when calculation of tax liability was on the higher side @ 10%; besides no exercise has been made to refund the excess amount so paid to the concerned taxpayers.

When contacted, Waheed Shahzad Butt told that refund of the wrongly paid/ collected tax must be the priority of the FBR without causing harassment to the taxpayer while FBR Policy Wing is facing severe criticism for its failure to effectively address the issue of tax reduction on tax charged on yield on Behbood/ Pensioner/ Shuhada Family Welfare Account under Code “930101” in the income tax return devised by the FBR for Tax Year 2023.

Member Policy should tender an apology before the pensioners, senior citizens and Shuhada families for the professional negligence and must be assured that illegal extra tax recovered through faulty tax return should be returned back promptly.

FBR to direct Member (Information & Technology) to ascertain number of cases in which excess tax has been paid by filers due to wrong calculation in Iris and refund the excess amount if any to the taxpayers within 45 days: FTO order added.

Copyright Business Recorder, 2023