ISLAMABAD: The Reforms and Resource Mobilization Commission (RRMC) has recommended legal changes in tax laws to avoid the Federal Board of Revenue’s (FBR) practice of issuance of multiple frivolous notices to the business community.
According to the recommendation of the RRMC to the government, it has become extremely difficult for documented sector to respond to notices for amendment / further amendments of income tax returns. It appears that the tax department, instead of focusing on untaxed /undocumented sector, has made it a benchmark / KPI to carry out amendments proceedings of corporate sector as an annual ritual.
Following steps should immediately be taken to avoid the practice of issuance of frivolous notices:
(i) The FBR takes too much time to form the Alternative Dispute Resolution Committee (ADRC) committee therefore; most of the taxpayers have now discontinued using this route. Like online appeal filing before Commissioner Inland Revenue Appeals (CIRA), the case should be allowed to be filed before ADRC online via IRIS portal for proper monitoring.
(ii) In case FBR fails to form a committee within specified timeline, IRIS system should either automatically process the application for form ARDC or the impugned order against which appeal has been filed should be treated as null and void.
(iii) Like ADRC, separate committee should be formed and taxpayers be allowed to report frivolous amendments / monitoring of withholding notices to such committee.
(iv) The FBR should compile a list of amendment proceedings initiated by tax officers and fate of those proceedings on the basis of order from an independent forum like the Appellate Tribunal Inland Revenue (ATIR).
Copyright Business Recorder, 2023
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