ISLAMABAD: The Federal Tax Ombudsman (FTO) has decided to conduct an investigation against the Federal Board of Revenue (FBR) for wrong computation in reduction of income tax liability on account of admissible tax relief available to pensioners, senior citizens and members of Shuhada families, for the tax return (Tax Year 2023).

It is reliably learnt that on the basis of complaint moved by a senior retired Army officer through tax lawyer Waheed Shahzad Butt, the office of the FTO had issued notice to the secretary Revenue Division and FBR Members and stated “whereas the mentioned complaint has been filed by the petitioner, and whereas the FTO has ordered to conduct an investigation. Now therefore you (tax officials) are required to submit reply to the allegations contained in the complaint by July 31, 2023 as required under Section 10(4) of the FTO Ordinance, 2000.”

The FTO will probe the allegations of maladministration as to why the FBR’s system is computing wrong income tax liability with incorrect rebate available to pensioners, senior citizens and members of Shuhada families, for the tax year 2023.

Tax lawyer Waheed Shahzad Butt, who has highlighted this anomaly, informed that the FBR Policy Wing is facing severe criticism for its failure to effectively address the issue of tax reduction on tax charged on yield on Behbood Certificates/ Pensioner’s Benefit Account/ Shuhada Family Welfare Account under Code “930101” in the income tax return devised by the FBR for Tax Year 2023.

Waheed further added that despite the FBR’s responsibility to ensure fair and equitable taxation for all citizens, it has come to light that pensioners, senior citizens and members of Shuhada families are being deprived of their rightful tax reduction entitlements. This failure to cater to the specific needs of this vulnerable segment of the population has drawn sharp criticism from various quarters.

Waheed told this correspondent that income tax reduction on tax charged on Behbood Certificates/ Pensioner’s Benefit Account in excess of applicable rate shall not exceed 5 percent of such profit in the light of Clause 6 of Part III of Second Schedule to the Income Tax Ordinance, 2001, while the FBR has failed to incorporate this beneficial computation in the annual income tax return devised for Tax Year 2023.

The FBR Policy/IT/Operation wing’s failure to address these issues demonstrates a lack of attention and commitment to ensuring fair taxation practices. As there are a series of instances of incompetency on the part of the FBR Policy/IT wings, pressure mounts for a comprehensive review of the policy wing’s processes and systems to prevent such issues from recurring in the future and to facilitate the taxpayers of Pakistan, Waheed added.

Copyright Business Recorder, 2023

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Farjad Ahmed Jul 25, 2023 01:16pm
Totally correct, inspire of the fact that 50% reduction for senior citizens have been done away with bur there is no shame that persists in FBR.The obse6is 100% correct. May the federal ombudsman for Tax give us some relief.
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Muhammad. Ayaz Jul 25, 2023 05:00pm
Very informative and useful website.
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Mian imtiaz ahmed Jul 25, 2023 06:51pm
Taxation of all specially of pensioners shuhada and senior citizons must be calculated as per lattest rules issued by govt to let this segment of society enjoy rebates in tax allowed to them.very sorry on part of FBR and its computer analyst not to update the system according to new notifications and rule it needs immediate attention of chairman FBR.
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Saba Umer Jul 25, 2023 09:12pm
FBR is perhaps biggest obstacle in tax collection in Pakistan. it teases citizens who pay tax and does not go behind those who do not pay tax
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Zeeshan Jul 25, 2023 09:56pm
@Saba Umer, It goes to every person who is liable to pay income tax or any other statutory regulatory duty.. Besides, for your kind perusal and information "FBR" has made Brodning Tax Base (BTB) department and its respective rules a d regulations. Whereas, leverage or easiness for tax broadening rakhna perta hay.. Verna sabhi ko tease ki ja raha aesa na lagy..
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Nasir Jul 26, 2023 10:08am
The senior citizens must be exempted from ATR on annual basis and old rates of withholding tax must be implied on profit in banks n NSC s eg 10% . Since profit rates are below par at NSC s in comparasion to banks . Also handsome relieves be given while sale / purchase of vehicles n houses / flats exclusively for their own use beside exemption in rail road fares n many more . Thanks
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Hashim Jul 28, 2023 10:21am
TAX COLLECTION IS MOTHER OF CORRUPTION...Government should earn from national assets to meet her expenditures.This way no national asset will run in loss at the same time job opportunities will be created.NO FILER/NON FILER SYSYEM FOR SENIOR CITIZENS...NO TAX DEDUCTION WHAT SO EVER FROM SENIOR CITIZENS...ALL air lines should provide min 60% off in national and international travels...senior citizens deserve to be looked after more than present..THERE SHOULD BE A LIMIT TO TAX COLLECTION LIKE ZAKAT..UNLIMILTED TAX COLLECTION IS CRIMINAL ACTIVITY..It needs special attention to avoid multiple taxing from all compass directions...SAY NO TO LOANS ..NO IMF LOANS..
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