EDITORIAL: Regrettably, the Federal Board of Revenue (FBR) continues to undermine its own functioning. Needless issues like its surprising silence over questions about the sudden disappearance, rather removal, of a tab from the new income tax return form, denying taxpayers the option of adjusting their liabilities against past refunds, that it belatedly restored just three days before the last date for filing returns, have made it impossible for many people to meet the end-September deadline for filing returns.
Quite naturally this prompted the Federal Tax Ombudsman (FTO) to take suo motu notice, conduct a quick investigation of its own and question the Board about the step that is being seen as illegal by all stakeholders other than itself. Now the usual calls for extending the filing date have been pouring in and will obviously grow, pushing a system already struggling to keep pace further behind schedule.
Such breaches are clear violations of fundamental rights under the Income Tax Ordinance, 2001, according to a strongly-worded plea from the Pakistan Tax Bar Association (PTBA) to the FBR chairman, lamenting that the present IT team had singularly failed in providing an efficient, user-friendly, hassle/error free and smooth system in a professional manner.
It also very rightly reminded the chief revenue collector that “there are certain obligations on the part of the taxpayers in filing of returns but at the same time there are also some obligations to be fulfilled by the tax machinery to facilitate the taxpayers in providing flawless return forms”.
Taxpayers would be relieved that it also requested they be fairly provided the statutory period of clear 90 days for submission of their income tax returns from the day the portal is error-free. This, and the fact that it provided a detailed account of all instances over the past year where FBR missed deadlines and overstepped the boundaries of the law make the latter’s strange rigidity all the more difficult to understand.
Why, after all, would it suddenly and without warning remove the column for adjustment for refunds, which every taxpayer is entitled to, and then not even take the trouble of explaining its action?
Pakistan’s chronically low tax-to-GDP ratio is of very great concern, especially now when the need to increase revenue is greater than ever, but it is sadder still that such issues are on the list of problems that need to be solved to even begin making any progress.
Once again the tax collection machinery itself is the biggest deterrent for willing taxpayers that want the net to grow and the country to benefit. Yet, once again, they fear they will be caught in a problem that is entirely of the FBR’s making; and also made to pay for it.
The missing tab from the form was not the only problem, of course. PTBA also pointed to many other areas in its letter, like the draft of manual returns of incomes of individuals and AOPs being issued late and leaving only 17 days to file manual returns, “which is insufficient as provided under the law”.
And that the return form for Small and Medium Enterprises (SMEs) was issued on the IRIS system without first sharing a draft, “under sub-section (2) of section 100E read with section 237 of the Income Tax Ordinance, 2001”. And also that the IRIS portal is calculating incorrect normal as well as initial depreciation allowance on purchase of plant and machinery; along with a number of other things.
The FTO should not have to force an explanation out of the FBR. It’s for the Board to know its duty and how to perform it. In this instance its performance smacks of sheer incompetence and negligence.
It must begin by explaining why it is not cooperating in a matter that is directly related to its own functioning as an integral arm of the state; one that collects its income. And it must, without any further delay, make sure that its system delivers to the people everything that they need under the income tax ordinance.
Copyright Business Recorder, 2022