Dr Asif Jah served in the Federal Board of Revenue (FBR) for 30 years before he was appointed the federal tax ombudsman (FTO) in August 2021. He is an upright officer who once apprehended a leading importer bringing in stents used in heart surgery declaring a Rs500 value while it was sold in the market for Rs50,000.He also frustrated a smuggling bid at Lahore airport, recovering 20 kilogram gold concealed in the body of a fridge. In this exclusive interview with The News on Sunday, Dr Jah talks about how the office of the tax ombudsman works and the measures he has taken for it to run smoothly. Excerpts:
The News on Sunday (TNS): As a former FBR officer how do you feel about overturning the decisions rendered by your former colleagues?
Asif Jah (AJ): I am the sixth FTO to be appointed but the first one from the revenue service. My predecessors were either former judges, former policemen or district management officers. I enjoy the advantage of having the knowledge of how tax officers operate. Like any organisation, there are many dedicated officers in FBR.However, there are some rent-seekers as well. Being an insider, I know the tactics the rent-seekers use to deny taxpayers their rights. I simply make sure that the genuine grievances of the taxpayers are addressed.
TNS: How does the tax ombudsman’s office work?
AJ: The office of the tax ombudsman works on behalf of the government to investigate and resolve citizen’s complaints on tax issues. Its decisions are binding on the revenue authority. Only the president of Pakistan has the authority to review the tax ombudsman’s verdict if it is challenged by the party affected by the decision. In 99 percent of the cases, he has rejected appeals against the tax ombudsman’s verdict. We decide cases quickly. Any complaint is addressed in a maximum of 60 days and the FBR is given 45 days to settle the issue considering the FTO’sruling. Complaints can be launched through SMS, through a mobile app, online or by visiting the FTO offices. Our goal is to provide taxpayers a hassle-free environment both in their tax assessment and refund cases.
TNS: Refunds are a burning issue. How does the FTO help businessmen obtaintimely refunds?
AJ: The FBR has instituted a computerised system under which the refunds of the exporters are promptly generated on the realisation of export receipts. This system has worked well for large exporters, but some of the small exporters cannot fulfil the documentation requirements of the refund application that appear cumbersome to them. In case of even a small lapse in filling the form, the computer stops the refund. These refunds were then handled by the FBR staff. This is against the spirit of the system that has ensured refunds without the involvement of the tax collector. Manual processing of refunds allows room to the rent-seekers. A computerised solution was introduced after rent seeking complaints by all businessmen seeking refunds. Ideally, the small businessmen should have been guided to complete the refund forms, but it did not happen. The FTO office on receiving delay in refunds removed some flaws in the application and removed unjust objections by FBR officials. Refunds amounting to Rs27 billion have been made by the FBR after the FTO intervention. These refunds have benefitted thousands of small exporters. Their cash flows have improved with the result that the highest increases in exports have come from small and medium-sized exporters.
We also keep an eye on the refund process to prevent fake refunds. Some cases of large fraudulent refunds were detected by the FTO staff. In one case a Chinese company was given an illegal refund of Rs123 million by FBR’s Faisalabad circle. Almost 97 percent of the complaints lodged by businesses are found genuine. Only 2-3 percent of complaints are rejected for having no solid ground. Businessmen are now confidently looking toward FTO for redressof their complaints. In the eight months since August 21 more than 2,000 complaints were lodged with the FTO office. During the same period last year, the number of complaints was 900.
TNS: Do you act only on formal complaints?
AJ: No, we keep our eyes open.For instance, we noticed that 8,500 unclaimed consignments were lying on the port for several years. According to rules these should have been auctioned but no one took the initiative. These consignments were occupying a lot of space. The FTO office ordered the auctioning of these consignments.This brought several billion rupees to the national exchequer. In another instance, we discovered that several international NGOs were deducting withholding tax on salaries and other transactions that is compulsory under the law. But the law also mandates that the withholding tax thus deducted be deposited with the exchequer. These NGOs were pocketing those deductions, instead. They have been made to pay a cumulative amount of Rs620 million that had been illegally retained by them.
Another case of public interest was investigated by the FTO office when it was found that a car manufacturer had charged 17.5 percent sales tax from over 1,000 car buyers at the time of booking. At the time of delivery, the actual tax paid was 12 percent. The company pocketed the additional amount.On FTO orders the company was forced to refund the excess amount to each buyer. Each buyer got a refund of over Rs65,000.
TNS:Does your mandate include recommending measures against tax evasion in different sectors?
AJ: Yes, we do keep an eye on tax evasions even by various documented sectors. The FTO office has probed the way transactions are carried out in the tobacco, sugar and steel sectors. There are broken chains in these trades through which numerous unregistered vendors and dealers operate out of the tax net. In the sugar sector, for instance, the FBR has started registering these tax evaders and tax revenue from this sector has increased. Next year we expect that tax compliance from tobacco and steel sectors to be better as well.
The writer is a senior staff reporter at The News