FBR hell-bent on freezing bank accounts for non-compliance

KARACHI: Federal Board of Revenue (FBR) will continue to exercise its power to freeze bank accounts and conduct raids in a bid to deter tax evasion and wealth concealment, its chairman said on Tuesday.

“Though a majority of taxpayers are honest there are still some people who deprive national exchequer of due share of revenue,” Tariq Mahmood Pasha, chairman of FBR said, responding to a business community’s opposition to the revenue body’s measures.

Members of Karachi Chamber of Commerce and Industry (KCCI), in a meeting with Federal Board of Revenue chief, said the tax authorities should stop forthwith the exercise of bank attachment and raids for recovery of taxes. Such measures put taxpayers’ reputation at stake, they added.

But, Pasha termed the FBR’s actions as “deterrence against tax evasion and concealment”.

“We are working together with provincial revenue authorities to develop a consolidated data bank of sales tax-registered taxpayers,” he said.

The chairman said a number of taxpayers improved their cash flow as they collected withholding tax but didn’t deposit the collected amount into the national kitty.

FBR established three special units in Karachi, Lahore and Islamabad to broaden tax base.

Income tax returns rose 26 percent to 1.08 million till December 15 as compared to the last year.

Pasha said a sudden decline in number of returns was recorded after 2013 because the government enhanced the threshold for taxable income, which exempted several taxpayers from filing the returns.

The chairman advised KCCI to submit budget proposals to help in improving the economy.

“Tax system cannot be improved without considering the proposals of business community,” he said.

Pasha agreed to business community’s objection related to misuse of discretionary power by the tax officials.

“Discretionary power could not be eliminated, but it would be curtailed,” he said. “Existing discretionary power, vested with the tax officials, is far less than the one given in the past.”

The business community urged FBR chairman to implement recommendations of Tax Reforms Commission (TRC) to improve the taxation system in the country.

The FBR chairman said an implementation committee constituted by the finance minister and FBR has initiated implementation of four to five TRC's recommendations.

Pasha expressed displeasure on the audit exercise undertaken by the tax offices. FBR is reviewing the audit mechanism, he said.

The chairman said a huge number of audit cases are pending as Federal Board of Revenue has capacity constraints.

He said that he had issued instructions to tax offices to avoid harassment and respect taxpayers. He asked the business community to help the tax body to improve audit. The business community urged the Federal Board of Revenue chairman to extend the last date for filing of income tax returns for tax year 2017 up to December 31 or at least exempt those who file returns till the yearend from automatic selection of audit.

Pasha said the FBR has extended the last date of returns filing many times during the year and it was decided not to allow further extension considering the return filing numbers between November 30 and December 15.