Failure to integrate with ‘RADAR’: FBR being empowered to penalise govt entities

ISLAMABAD: The Federal Board of Revenue (FBR) is being legally empowered to impose penalties and prosecute government organisations, which failed to integrate with the FBR’s “real-time accessed data analysis repository (RADAR)” for providing real-time access to information and database of financial and economic transactions.

The powers of the FBR have been proposed in the SRO 1771(I)/2023 to introduce draft amendments to the Income Tax Rules 2002.

A senior FBR official told Business Recorder that the final notification would be issued during the current week. The notification will also contain information about the consequences of non-compliance by government organisations. The Documentation of Economic Transactions Ordinance, 2023, was not promulgated by the caretaker government due to technical issues.

FBR notifies list of entities to be integrated with its ‘RADAR’

This has nothing to do with the imposition of penalties on government organisations. The Law Division has categorically informed the FBR that the caretaker government cannot promulgate this specific Ordinance under section 230 of the Elections Act, 2017. The promulgation of the said ordinance would be in violation of section 230 (Functions of Caretaker Government) of the Elections Act, 2017.

“The rules are the subordinate legislation and we have referred to the Income Tax Ordinance, 2001, for the purpose of penalties to be imposed on government organisations in case of non-compliance. The penalties provided in the Income Tax Ordinance for obstructing and other offences have been mentioned in section 182 of the said Ordinance,” officials maintained.

Once the new government comes into power, the new legislation is also expected in this regard.

Under the draft rules, the FBR will integrate all financial data and economic transactions of 145 organisations including federal government/semi-autonomous departments, provincial government departments, financial institutions and private institutions for the purpose of documentation of economy and broadening the tax base.

In this regard, the FBR will direct these 145 organisations to integrate with FBR’s “real-time accessed data analysis repository (RADAR)” for providing real-time access to information and database.

Under the rule 39K (consequences of non-compliance or contravention), the FBR has specified that the integrated organization which is found to have tampered with the IT platform or fails to integrate with the Board’s RADAR, or refuses to furnish the information thereunder or furnishes false, incorrect, incomplete, or unauthenticated information, the principal accounting officer or the principal officer of such organization shall be personally responsible for such default and shall be liable to a penalty and/or prosecution, in accordance with the relevant provisions of the Income Tax Ordinance.

Notwithstanding anything contained in sub-rule (1), where the default as specified in sub-rule (1) has been committed and it is proved that it was committed with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the integrated organization, such director, manager, secretary or other officer shall be guilty of default and shall be jointly and severally liable for penalty and/or prosecution as specified, it added.

Copyright Business Recorder, 2024