ISLAMABAD: The government has empowered the Commissioner Inland Revenue to re-compute the tax payable by the declarant of the tax amnesty scheme in cases of wrongly claimed tax credit on foreign investment for industrial promotion.
According to the Income Tax (Amendment) Ordinance, 2022, the powers have been given to the Commissioner Inland Revenue under the tax amnesty scheme. Where any credit is allowed and subsequently it is discovered by the Commissioner Inland Revenue that any one or more of the conditions specified in this section was or were not fulfilled, as the case may be, the credit originally allowed shall be deemed to have been wrongly allowed and the Commissioner, notwithstanding anything contained in the Income Tax Ordinance 2001, shall re-compute the tax payable by the taxpayer for the relevant year and the provisions of this Ordinance shall, so far as may be, apply accordingly, it added.
A tax expert explained that the newly inserted section 65H provides that the credits availed by the taxpayers may be revoked by the Commissioner in case of non-fulfilment of any of the specified conditions. Similar conditions have been provided earlier in sections 65B, 65D, 65E, etc., which has resulted in unnecessary litigations between department and the taxpayers.
It is, therefore, suggested that the revocation of the tax credits may be made subject to approval of Chief Commissioners.
Copyright Business Recorder, 2022