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FBR’s new list may lead to suspension of taxpayers

KARACHI: The Federal Board of Revenue’s move to compile “Active Taxpayers List” of existing taxpayers to distinguish between compliant and non-compliant may result in suspension of a large number of taxpayers, observed tax consultants.

The FBR has recently proposed amendments through insertion of Rules 81B in Section 181A of the Income Tax Ordinance 2001, wherein it has been proposed to prepare a list of active taxpayers thereby classifying them into compliant and non-compliant taxpayers.

The board has laid down different conditions for preparing “Active Taxpayers List” for taxpayers who are filing returns manually and for those filing returns electronically or e-filing. However, the proposed law would apply on all existing taxpayers in the country.

The Income Tax Bar Association Karachi (ITBAK) while taking serious notice of the FBR move termed the proposed amendments a “Draconian Law” and totally rejected the insertion of Rule 81B in section 181A of the Income Tax Ordinance 2001.

The Bar strongly demanded of the FBR to refrain from imposing such a law which is also against the main statue and would only further promote corruption across the country in the field offices of the Board.

The ITBAK has pointed out that the functions and powers being delegated under the proposed amendments through SRO 09(I)/2011 negate the various existing provisions contained in the Income Tax Ordinance 2001.

In a rejoinder to the chairman FBR, the president ITBAK Ali A Rahim said that the bar is of the opinion that a taxpayer once suspended would have to run from pillar to post to get himself cleared or reinstated and his request would only be accepted when gratification is used which is very rampant and this fact is not a secret. The bar fears that a very large number of existing taxpayers would be suspended particularly when the record and data of FBR itself is not updated and the web portal of PRAL faces numerous technical problems and the unwarranted use of this law would be disastrous and would have negative impact on business activities of taxpayers.

The proposed rules would be considered, the Bar pointed out, to be a great tool to discourage the existing taxpayers as the element of harassment and high handedness cannot be ruled out while exercising the powers available in the proposed amendments. The ITBAK regretted that since the FBR has failed to achieve the task of broadening tax base, use of such harsh rules would depress business activities of the existing taxpayers and would also be considered detrimental to policies of facilitation and mutual trust which has remained a policy matter of reforms agenda.

The Karachi tax bar which is the largest representative body of tax consultants urged upon the FBR to shelve the SRO 09(I)/2011 for the time being particularly when the country is faced with economic crisis along with geo-political challenges in the region.

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