Businessmen demand end to tax officials’ discretionary power

KARACHI: Business community on Monday demanded the government to immediately withdraw the ‘discretionary’ power given to the officials of Federal Board of Revenue (FBR) over the past five years.

Businessmen, at a convention of All Pakistan Chambers’ Association, urged the government to get the raids on business premises stopped and put to an end the illegal procedures of freezing bank accounts for tax recovery.

Karachi Chamber of Commerce and Industry (KCCI) hosted the convention attended by around 15 chambers of commerce and industries and 20 business associations. Siraj Kassam Teli, chairman of Businessmen Group said entire business community was made hostage to “the draconian discretionary powers given to FBR officials.”

“Instead broadening the tax base, the FBR resorted to squeezing the existing taxpayers by raiding the premises and freezing their bank accounts,” Teli said. “Nowhere in the world, there is a practice of taking penal action without giving an opportunity of being heard.”

He further said in several cases the recovered amount is not passed to the FBR, but goes into the pockets of the officials.  The convention reached on an agreement to adopt a joint strategy. All the participant chambers and association agreed not to submit any proposals or recommendations for the budget 2017/18.

The ministry of finance and the FBR were urged to first implement the budgetary proposals submitted by the participants during the last four years.

They asked the ministry and the FBR to withdraw the provisions and laws giving immense discretionary powers introduced through the Finance Acts during the past four years. 

“These laws have kept a large number of potential taxpayers out of the tax regime,” a statement said.

The chambers and associations said the recommendations forwarded by the Tax Reforms Commission (TRC) should immediately be followed.

The government constituted the TRC and the recommendations were taken from all the stakeholders.

The business bodies further said the government should avoid adopting amendments into the laws through a finance bill. “Finance bill should be confined to the budgetary and fiscal measures only,” said the statement. “Any changes to the tax laws should be tabled through separate bills in the parliament.” The convention denounced the misuse of powers by the officers of Inland Revenue under several provisions of Sales Tax and Income Tax and urged the government to withdraw such provisions. 

“Otherwise the government will be responsible for the consequences which may force the business community to go to any humanly possible means and actions which may have negative ramifications for the revenue,” said the statement.

The business community said if demands are not accepted remedy from courts against discretionary powers of the FBR will be sought.

The convention agreed to form a six-member consultative committee, which would discuss the issues with the FBR and other authorities.