ISLAMABAD: A Senate panel recommended the Government for the dismissal of taxmen who made inflated demands over taxation and then rejected plead of the taxpayers under pressure from the Federal Board of Revenue (FBR)
The Senate standing committee on Finance gave a con-sentient recommendation of dismissal amid the orders of a sharp increase in tax assessment against the taxpayers by the FBR.
This resulted in a jump in a disputed amount up to Rs3 trillion, following a 70% increase in litigation amongst the tax matters in the last eight months.
The standing committee urged the termination of all those FBR commissioners who issued unjust tax demands or rejected taxpayers’ appeals against these demands while showing its annoyance over the high-handed demeanor in dealings with the taxpayers.
The Standing Committee Chairman, Senator Talha Mehmood of Jamiat Ulema-Islam-Fazl (JUI-F), informed the committee that he would assure a recommendation by the Senate to put further pressure on the Government to accept the proposal.
The FBR has been focusing on big cases to raise suspicion on tax demands over the last year, which has led the registered and those taxpayers filing tax returns not completely fulfilling their responsibilities.
The FBR had issued around 52,000 tax notifications and raised tax demands of Rs31.9 billion in 2018. Talha stated while presenting a document from the FBR. The number of tax notifications grew to 87,000 in 2020-21, and demand increased to Rs1.8 trillion, he added.
The Standing committee chairmen said that the tax demands and tax recoveries were unmatched, pointing towards the excessive demands made.
“I received calls from FBR commissioners who swore that they were under pressure to issue tax notices and reject appeals,” said Talha, he further added that the FBR put pressure on the commissioners on June 29 and 30.
Qaiser Iqbal, the FBR’s new Inland Revenue Operations member, denied the allegations stating, “I vow as a gentleman that there was no pressure from the FBR headquarters to decide appeals in favor or against anybody.”
After the FBR modified its strategy and examined every Rs1 billion and above turnover, the amount and number of tax notices increased, Qaiser added.
The Finance Minister, Shaukat Tarin promised FBR would not issue new tax notices and assured the withdrawal of wrong notices. Still, these promises remained unfulfilled, said the MQM-P Senator Faisal Sabzwari.
The standing committee ordered the FBR to produce data of tax demands made, appeals denied, and recovery made against notices sent in the previous five years.
Last month, the FBR asked commissioner appeals to provide performance updates to their chief commissioners, as the legal experts questioned the directives.
Rs1.8 trillion was stuck in litigation, which has gone up to Rs3 trillion, an increase of Rs1.2 trillion in just eight months; about 76,700 cases were under litigation from commissioner appeals in the Supreme Court of Pakistan, which have now increased to nearly 90,000, which makes roughly 23,000 pending cases, according to the FBR data statistics.
In the last eight months, there had been an increase of about 175% in the disputed taxes pending before the commissioner appeals, and around 60% of disputed tax amount is pending, the Data showed.
According to FBR figures, over 56,000 cases were waiting in the Appellate Tribunals, involving an additional Rs631 billion in income. In December of last year, Rs442 billion was in dispute before the Appellate Tribunals, a figure that has now risen by 43%.