President Arif Alvi has declared that the Federal Tax Ombudsman (FTO) is fully authorized to initiate a Suo Motu Investigation for any alleged maladministration committed by the Federal Board of Revenue (FBR) officials.
The President has rejected six representations filed by the FBR against the order of the FTO. Federal Tax Ombudsman (FTO) had directed the FBR to inspect the subject six cases to ensure that action is initiated & concluded as per information provided by FTO during instant investigations.
The Chief Commissioner LTO Islamabad to identify the officers who are responsible for the unwarranted delay and resultant loss of revenue.
The said Own Motion investigations were initiated in terms of Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) because the FTO Secretariat has evidence-based information that some of the most meaningful and innovative initiatives of FBR’s officers and field formations stand diluted and washed away due to follow up failure, frequent posting transfers of officers and massive changes of jurisdictions.
Moreover, through In-House Analysis FTO Secretariat has also identified that though FBR and its dozens of field formations maintain an organized web portal, rich data center, exhaustive databases, elaborate and comprehensive operational soft wares and houses a full-fledged & home-grown IT support system i.e., Pakistan Automation (Pvt) Ltd (PRAL), yet neither FBR HQs nor its any single field formation maintains any IT based tracking system, archiving various valuable initiatives & ventures made by different FBR’s organizations, officers, teams or specially created cells from time to time.
Therefore, it was reasonably assumed that in most cases the good job done is wasted, diluted, or compromised with the transfer of individuals, dissolution of units/ cells, and takeover by new managers.
While conducting the aforesaid In-House Analysis, the FTO Secretariat has information on record that a list of potential cases of tax evasion, (including the aforementioned cases) along with a detailed Investigation Report and case Study was prepared & shared by the Directorate General (DG), broadening the tax base (BTB) FBR.
This valuable information was duly shared in December 2018, with the concerned field formations for taking action against said entities for not declaring true particulars of their receipts/income and not discharging their responsibilities as withholding agents.
However, in 2019, FBR’s management suddenly shelved this whole BTB regime overnight disbanding BTB Zones Islamabad, Lahore, and Karachi. The office of DG BTB was relegated to a ceremonial entity assigned as an additional charge. Thus, in addition to losing an effective organization, the repository of the whole above data/information was suddenly rendered extinct.
Such a kneejerk attitude of FBR reflects clear maladministration i.e. neglect, inattention, delay, incompetence, inefficiency, and ineptitude, in the administration or discharge of duties and responsibilities.
FTO’s in-house analysis was mainly based on investigation reports generated by DG BTB which clearly shows that the above concerns were not declaring the true particulars of Income and were not discharging their responsibilities as withholding agents.
To make out foolproof cases, the total receipts of the said companies were obtained by DG BTB from the data hosted by the International Aid Transparency Initiative, which was compared with the declared receipts in the tax returns. Huge discrepancies were observed casting doubt about tax evasion by the above companies.
A detailed analysis was provided to the department discussing parameters and extent of tax evasion. However, after the disbanding of the BTB office, progress on this case was not known. It seems that the valuable information shared with the field formations was lost due to the inattention, incompetence, and ineptitude of the officers holding jurisdiction in this case.
The President ruled that the FTO is fully authorized to initiate a Suo Moto Investigation for any alleged maladministration on the part of the Revenue Division or any tax employee. Thus, the department’s objection is untenable.
Hence, FBR is to submit a holistic report in this regard to the FTO’s Secretariat within 90 days positively explaining its stance.
The President said that the statutory body is duty-bound under the law to perform its functions/duties by law. It has been observed that action regarding the identification of a responsible officer if required, has been left to be taken by the department itself.
Needless to mention in case any departmental action is proposed against any official, he/she will be afforded the due opportunity of explaining reasons and defense to satisfy the requirement of due prod natural justice. Thus, in the circumstances of the case, the representations are liable to be disposed of accordingly, the President’s order maintained.
Accordingly, the President, as per his decision, has to dispose of the representations of FBR, the order added.
