Notices to fish exporters: FTO directs FBR to initiate proceedings against taxmen

ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to initiate proceedings against the officers/officials found involved in maligning FBR, choking an export-oriented sector and jeopardizing the inflow of foreign exchange.

The FTO has initiated Own Motion (OM) investigation on the allegations of issuance of multiple notices to exporters of fish products & demanding bribe to settle those notices causing harassment & hurting inflow of foreign exchange on account of fish exporters.

According to an order issued by the FTO on Friday, the issuance of illegal notices of income tax/sales tax, unexplainable withdrawals in certain cases and imposition of heavy taxes in some identical cases by Commissioner Zone-l, Regional Tax Office (RTO)-l Karachi and his team from the exporters of fish, earning foreign exchange for the country causing fear, mental agony and harassment tantamount to maladministration.

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The FTO has initiated Own Motion (OM) investigation through exercise of jurisdiction under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) raised by Pakistan Fisheries Exporters Association against issuance of illegal notices of income tax I sales tax and settling of those notices allegedly after taking bribe by the Commissioner Zone-l, RTO-I Karachi and his team from exporters of fish earning foreign exchange for the country causing mental agony & harassment.

The FTO’s order stated that the export of fish products mostly to China, Thailand and Middle East countries, is fetching foreign exchange worth US$ 450 million. Since the exporters earn foreign exchange to reduce trade deficit, the Govt has facilitated the exporters by deducting only one percent of export proceeds at source as income tax which is the final tax liability.

The exporters do not have to file any books of accounts except a statement under section 115 (4) of the Ordinance. Even the withholding tax under section 153 of the Ordinance is exempt under clause 45, part IV of Second Schedule to the Ordinance. The GST on exports is zero rated.

The FTO analyzed that the threatening show cause notices confronting unexplained income and suppressed taxable supply of billions of rupees were withdrawn in shady manners. The quality of assessment orders consisting of one page giving a clean chit reflects the corrupt motives for extortion.

In cases where the exporters contested the notices billions of rupees in taxes were imposed but all of these cases were either annulled or set aside for denovo consideration by higher appellate forums. In short, the whole dubious assessment proceedings speak itself as perverse, arbitrary or unreasonable, unjust, biased, oppressive and are proof of administrative excesses perpetuated by the Commissioner, Zone 1, RTO-1 Karachi and his team of IRAOs and ACIRs on exporters of fish products, FTO order added.

The FBR is directed to initiate Fact Finding Inquiry proceedings, to be conducted by Directorate General I&I-IR and furnish its report within 60 days to the FBR, FTO directions said.

The FBR’s Management & HR wing to initiate appropriate proceedings in the light of findings of Directorate General I&I-IR against the officers/officials found involved in maligning FBR, choking an export-oriented sector, thus compromising national interest and jeopardizing & impeding the inflow of foreign exchange for the country, the FTO’s instructions to the FBR added.

Copyright Business Recorder, 2024