The President of Pakistan, Dr. Arif Alvi, has issued an order in favor of the declarants of the Tax Amnesty Scheme 2019 (assets declaration scheme) who had deposited a tax of billions of rupees under the Tax Amnesty Scheme 2019 (assets declaration scheme) but had been unable to upload their declarations on the deadline of 3 July 2019 due to the failure of the Federal Board of Revenue’s (FBR) IT system.
He has directed the FBR to take immediate measures to resolve the matter of the filing of declarations by the aggrieved persons who had deposited a tax of billions of rupees under the Tax Amnesty Scheme 2019.
In this regard, Dr. Alvi has upheld the order of the Federal Tax Ombudsman (FTO) and disposed of the appeals/representations referred by the FBR against the landmark order issued by the FTO. He has also referred to Section 17 of the Assets Declaration Ordinance under which the federal government can resolve the matter and remove the difficulties.
Despite the fact that the declarants had deposited billions of rupees two years ago, the FBR has not resolved the matter of the taxpayers, the president’s order added.
He declared in the order that the issue had been caused by a system failure and not a deliberate act on the behalf of the FBR officials, and added that it would not be fair to hold the FBR’s officials responsible for the failure of the system.
The FTO has rightly found the solution by invoking Section 17 of the Assets Declaration Ordinance for the removal of difficulties, his order detailed.
The FTO’s order stated that it was the responsibility of the department to keep the system running smoothly until the last minute but it had unfortunately failed to cater to the needs of the declarants. The general public has suffered because of the inadequate arrangements made by the FBR to address the expected load on its system.
Previously, the FTO had directed the Federal Board of Revenue (FBR) to facilitate thousands of taxpayers in the filing of declarations under the amnesty scheme (Assets Declaration Ordinance, 2019) who had deposited billions of rupees as tax but had been unable to upload their declarations on the last date on 3 July 2019 due to the failure of the FBR’s IT system. In this regard, it had issued a landmark judgment (0011/OM/2020) to give relief to the aggrieved persons who had availed of the amnesty scheme.
The FTO has also recommended that the FBR make arrangements and facilitate the filing of declarations in respect of all the aggrieved persons by invoking the provisions of the Income Tax Ordinance, update the IT system of the FBR (which requires a thorough review and efficient improvement), and report compliance within 45 days.
The department had failed to prevent this situation wherein the generation of CPR should have been subject to the uploading of the declarations. In this situation, no such anomaly would have arisen whereby thousands of declarants who had paid billions of rupees in taxes would have been misled. Again, the gravity of the situation had not been evaluated because the tax thus deposited was neither refundable nor adjustable, the FTO said.
The department’s emphasis on the tax chargeable of the declaration was not the requirement of the Ordinance, which appears to be vague.