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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

Comments

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Hassaan Naeem Sep 30, 2022 10:57am
This is very good piece on how FBR is 'behaving' with its partners i.e. taxpayers and their consultants. The online filing was introduced in the year 2007 and as of today, we are still struggling with system glitches. Each year, as the time to file the returns of income comes, the hue and cry from the real stake holders increases which somehow does not effect the officials. Yet to see an FBR which is progressive, knows how to benefit from technology and provide an atmosphere to the taxpayers so that they feel that they are in safe hands unless they commit something that tigers adversity against them.
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Habib Subhani Sep 30, 2022 11:01am
True and agree. FBR is acting like a stubborn baby. They never bother to cater the problems faced by the taxpayers. Wrong calculation of minimum tax deducted under section 153 is still there despite lapse of three years.
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Imran Khan Oct 01, 2022 01:31am
Refund adjustments of previous years against current tax liability is a thorny issue. Under the Universal Self Assessment Scheme (USAS), taxpayers have been freely adjusting their liability against a refund which is undetermined or inaccurate most of the times; thus, a substantial revenue is lost every year only because IRS doesn't have the capacity to scrutinie each & every tab of a return. A way out is to make attachment of relevant documentary evidence/CPRs with Return mandatory before refund adjustment...I know its too much to ask in a country where taxpayers don't even attach Financial Accounts with Returns in sheer violatio of Section 114 of the Income Tax Ordinance. But as FBR stands for the stoping the leakages, closing refund adjustment Tab off was perhaps a knee jerck reaction in this regard.
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Adnan Aziz Oct 01, 2022 12:02pm
Come what may, things in this country can never improve. Only a fool will be optimistic in this regard. Mark my words
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KUKhan Oct 01, 2022 03:08pm
FBR should be declared as the 5th pillar of the state (which actually won’t make a difference), but they will stand in the League of Corrupt Departments that are consciously eating up the country. There are 70 different taxes levied on people and businesses, yet only 7 million people pay tax in a population of 220 million, of these, only 2.5 million are active taxpayers…..and guess what, every year these unfortunate taxpayers are bombarded with questions and notices.
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Bloody Civilian Oct 04, 2022 12:21pm
FBR is a dysfunctional organization. This just serves to prove it here and every year since IRIS was launched
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