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ISLAMABAD: President Dr Arif Alvi has directed the Federal Board of Revenue (FBR) to take measures to resolve the matter of filing of declarations by the aggrieved persons, who have deposited tax of billions of rupees under the Tax Amnesty Scheme (Assets Declaration Scheme).

In this regard, the president has upheld the order of the Federal Tax Ombudsman (FTO) and disposed of the appeals/representations referred by the FBR against the landmark order issued by the FTO.

The president has quoted Section 17 of the Assets Declaration Ordinance under which the federal government can resolve the matter and remove the difficulties. Despite the fact that the declarants have deposited billions of rupees two years ago, the FBR has not resolved the matter of the taxpayers, the president added.

By doing so, the FBR may be able to collect not only tax worth billions of rupees, but also thousands of new taxpayers would come into the tax net, the president observed.

About the inefficiency and negligence of the FBR officials, the President declared in the order that the issue was due to the system failure and not deliberate act on the behalf of the FBR officials. President also pointed out that it may not be fair to hold FBR officials responsible for the system failure. The FTO has rightly found the solution by invoking section 17 of the Assets Declaration Ordinance for removal of difficulties, President order added.

Earlier, the FTO had directed the Federal Board of Revenue (FBR) to facilitate thousands of taxpayers in filing of declarations under the amnesty scheme (Assets Declaration Ordinance 2019), who deposited billions of rupees as tax, but were unable to upload their declarations on the last date, i.e. July 3, 2019 due to failure of the FBR's IT system. In this regard, the FTO had issued a landmark judgment (0011/OM/ 2020) to give relief to the aggrieved persons availing the amnesty scheme. The FTO has recommended the FBR to make arrangements and facilitate the filing of declarations in respect of all the aggrieved persons by invoking the provisions of Section 17 of the Income Tax Ordinance; update the IT system of the FBR, which requires thorough review and efficient improvement, and report compliance within 45 days. The FTO on own motion and on various petitions of Amnesty Declarations represented by the Pakistan Tax Bar Association (PTBA), who deposited the due taxes for availing Amnesty Scheme but could not file the declarations as per law due to failure of FBR IT system, IRIS on last date of Amnesty Declaration 2019, as on July 3, 2019, has declared inefficiency, incompetence of the officials of the FBR while designing the IT system to fulfill the needs of public availing the Amnesty Declaration Ordinance 2019.

According to the findings of the FTO, inefficiency, negligence, and incompetence of the department officials in designing the system making adequate arrangements and failure to give full effect to the provisions of the Ordinance does amount to maladministration in terms of Section 2(3)(ii) of the FTO Ordinance, 2000. The order of the FTO revealed that an own motion investigation was initiated, while exercising powers conferred u/s 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) on the complaint of delegation of office bearers of PTBA to the FTO, alleging that thousands of taxpayers/persons, who intended to avail the benefit of Amnesty Scheme, promulgated by the Government of Pakistan, as Assets Declaration Ordinance, 2019 (the Ordinance) deposited billions of rupees of tax but were unable to upload the declaration of assets, on the last date i.e. 03.07.2019, due to failure of IT system of the Department. The department had failed to pre-empt this situation, where generation of CPR should have been subject to uploading of the declarations. In that situation, no such anomaly would have arisen, wherein thousands of declarants who paid billions of rupees in tax had been misled. Again gravity of the situation had not been evaluated because the tax so deposited was neither refundable nor adjustable, the FTO said.

The emphasis of the department the tax chargeable of the declaration was not the requirement of the Ordinance, appears to be vague.

It was the responsibility of the department to keep the system running smoothly till the last minute but unfortunately, it failed to cater to the needs of the declarants. The general public had suffered because of the inadequate arrangements made by the FBR to address the expected load on its system.

Since the department has failed to ensure smooth functioning of its IT system to facilitate the prospective declarants, to avail the amnesty scheme by uploading their declarations on the last date. Therefore, it amounts to incompetence and inefficiency. On part of the FBR officials, the FTO stated.

Copyright Business Recorder, 2021

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