Tax officials barred from raids without approval

KARACHI: The Federal Board of Revenue (FBR) has restrained officials of Inland Revenue from conducting raids on taxpayers’ premises without approval.

“No commissioner or authorised officer shall undertake exercise of search or audit without approval of entering into premises of any taxpayer,” the FBR said in an order to chief commissioners of Inland Revenue a day earlier.

The FBR directed the chief commissioners to act safely in invoking section 175(I) of Income Tax Ordinance, 2001. Under the section, a commissioner or authorised persons have discretionary powers to enter premises of taxpayers without any approval for the purpose of search, obtaining record and conducting audit.

The FBR said it received complaints about abuse of powers by the tax officials. The FBR further said if there is need to undertake such activity then a prior permission of the chief commissioner is necessary.

In May, FBR Chairman Shabbar Zaidi soon after assuming the charge, issued directives to bar officials from conducting raid on taxpayers’ premises.

“There will be no raid on any premises of any existing taxpayer without prior approval of Member (IR-Operations) and Chairman,” the FBR said in a statement then, citing its chairman’s directives. “If there are evidences of economic transaction(s) which are chargeable to tax and the organisation / entity is not tax registered then officer of that jurisdiction will report it to the Member (IR-Operations) and Chairman, FBR, who will provide necessary direction for future course of action.”

The FBR further said there will be no suspension from active taxpayers list unless there is personal interaction with CEO/owner of the business 24 hours before suspension. “List of all cases of suspension after suspension will be sent to Chairman FBR and Member (IR-Operations) with reasons of suspension and evidence of personal interaction.”

The revenue body said it took the decision to facilitate taxpayers in undertaking smooth business activity.

Businessmen have been resenting the actions of tax authorities and anti-graft body since the present government held the office last year. They said the actions are affecting the business environment and shattering confidence of law-abiding taxpayers.

Faced with a challenge to broaden narrow tax base, the government is taking measures to accelerate documentation of the economy. Taxpayers are encouraged to file returns of income tax and wealth statements. While government officials have assured businessmen of checking alleged harassment by the tax officials, it has clarified on several instances that there would be no rollback in its drive to document the economy.