FBR to beef up officials’ authority for tax recovery

KARACHI: The Federal Board of Revenue (FBR) could relax restriction on its officials to take permission of the board’s head or member Inland Revenue prior to conduct raids or freeze bank accounts for recovery of defaulted tax amount, sources said on Tuesday.

The sources said it was decided in the recent meetings that the Commissioners Inland Revenue of large taxpayers units (LTUs) and corporate regional tax offices (RTOs) would be allowed to take action without approval of FBR chairman and Member IR Operations. However, the commissioners of RTOs would require prior approval of chief commissioner Inland Revenue prior to take an action.

The sources said Nausheen Javed Amjad, who took charge of the apex tax authority following Shabbar Zaidi’s absence, was reviewing the revenue collection position in discussion with LTUs and RTOs, earlier this week.

Shabbar Zaidi, who is on leave of absence as FRB chief for over a month, imposed the restriction soon after assuming the charge in May 2019.

However, the revenue body might relax the condition on tax officials for making recovery. The tax offices informed the chairperson about bleak situation of the tax collection and requested for relaxation to make recovery of defaulted amount. The tax offices also informed that taxpayers were taking undue advantage of the restrictions.

Zaidi restricted IR officers for invoking a section (175(1) of Income Tax Ordinance, 2001), which deals with entering business premises of taxpayers for examining tax matters. The restriction was imposed on the grounds that the FBR had received numerous complaints of taxpayers that tax officials were abusing powers available under the section.

Similarly, restriction has been imposed on freezing bank accounts of taxpayers for recovery of defaulted tax. However, tax officials are required to take action in such scenario after taking prior approval of FBR chairman of Member Inland Revenue (Operations).

The sources said the relaxation is timely required, as the government is neither introducing any mini budget nor increasing tax rates for enhancing tax collection.

The FBR faced huge shortfall in revenue collection in the seven months of the current fiscal year. The revenue body collected Rs2.4 trillion during July – January 2019/20. The annual target is Rs5.238 trillion.

At present, the FBR needs Rs2.838 trillion in the last five months of the current fiscal year, which appears to be a difficult task for the tax machinery.

Besides, the FBR might also announce working days on Saturdays. It has already imposed ban on all kinds of leaves of officials, except for Hajj, Umrah and Ziarat, to enhance revenue collection.