‘Unfair’ tax deduction by automobile company: FTO Jah praises President’s decision

LAHORE: President Dr Arif Alvi has rejected 25 appeals of the Federal Board of Revenue (FBR) against a decision on unfair tax deduction by an automobile company by the Federal Tax Ombudsman (FTO), said FTO Dr Asif Jah.

While presiding over the 3rd meeting of the advisory committee on Monday, he said hundreds and thousands of customers of the company would be benefited from his decision, as the company would have to pay back millions of rupees refund to them.

According to him, the company was delivering automobiles on 12 percent tax while registering the purchase order at 17 percent. The customers had approached the FTO for refund of 5 percent tax. He said he had decided that the Board was eligible to charge tax imposed on taxpayers at the time of supply of vehicles. The Board had made a representation (appeal) to the President of Pakistan against this decision, he said.

He said he was focused on resolving such tax issues, which have a massive impact on the part of taxpayers. It was not matter of complaints but the impact of my decisions, which is important for me,” he asserted and added that he was focused on removing the distortions in the tax system.

Dr Jah said he has also protected the contractual employees in one of his recent judgments. He said the FBR was deducting 17.5 percent tax against the income of contractual employees, as the Board does not treat them as salaried persons. However, he said, section 12 of the Income Tax Ordinance does not exclude them from the definition of salaried person. Therefore, no such deduction is lawful against their income. He has expressed the hope that the Board would not file any representation against this decision in the larger interest of the contractual employees.

He said President Alvi had also sought apology from a private citizen and reprimanded the Board for not paying the refund and wasting his and FTO office’s time.

According to him, the FTO has also detected 125 million refund amount paid illegally by the Board and charge sheeted four serving officers. In this way, he said, the FTO has earned prayers of the poor taxpayers in the country.

Dr Jah said has disposed of 1500 cases in last four months and extended maximum relief to taxpayers. Also, he said, four new offices have been set up in Sargodha, Sialkot, Sukkur and Abbotabad to accommodate complaints of taxpayers. The FTO has also launched a mobile application on 28th February for registration of complaints. The complainants can also get status of their complaints on an exclusive number issued recently, he added.

According to him, his office was set to conduct a study on substituting the role of Alternate Dispute Resolution Committees under section 33 of the Income Tax Ordinance. He said he was actively pursuing the issues of taxpayers and getting them resolved even on telephone. He appreciated the role of advisory committees, saying that they were bridging gaps between the taxpayers and tax machinery. Dr Asif said he had promised to make the FTO as business-friendly institution after assuming charge on 29th September 2021.

Copyright Business Recorder, 2022