FTO Orders FBR to Improve Security As Data Breach Causes Rs 81.43 Billion Tax Fraud

The Federal Tax Ombudsman (FTO) has demanded immediate action to secure taxpayer data and apprehend the culprits, pushing the Federal Board of Revenue (FBR) to implement robust cybersecurity measures.

The FTO’s investigation into a significant cybersecurity breach that resulted in fraudulent transactions revealed critical weaknesses in FBR’s data security. The cyberattack led to Rs. 81.43 billion in fraudulent transactions and a tax loss of Rs. 14.66 billion.

Meanwhile, the number of complaints filed by taxpayers against the Federal Board of Revenue (FBR) with FTO has witnessed an increase of 67 percent in 2024 against last year.

Addressing a press conference on Wednesday, Almas Ali Jovindah, Advisor Legal & Media Wing informed that over the past ten months, the FTO Secretariat received   10,515 complaints, of which 9,900 have been resolved an impressive uptick from previous periods.

He said that action against corrupt tax officials is only possible after filing of complaint by the concerned businessman. If a tax officer has taken bribes or speed money, the complaint has to be filed with the FTO. The business community should come to the FTO without any fear of harassment.

Highlighting this achievement, Advisor Legal, and Almas Ali Jovindah, emphasized the notable progress made. Particularly, the proactive use of Section 33 of the FTO Ordinance, aimed at informal dispute resolutions, has surged, streamlining the resolution process for taxpayers.

A key impact of the FTO’s intervention has been the expedited processing of delayed tax refunds. In just ten months, Rs 2.00 Billion was refunded to taxpayers, a marked increase from Rs  17.742 Billion in 2023. Additionally, Dr. Jah has championed a record number of  31 own-motion investigations, addressing systemic issues within the tax administration, reaffirming the and FTO’s dedication to eradicating taxpayer grievances. In the first ten months of the current calendar year, the number of complaints has increased by 67 percent. And we have conducted 117 outreach sessions in 2024, he said.

Almas Ali Jovindah stated that FTO’s performance has also been bolstered by a seasoned advisory team conducting extensive outreach efforts to educate the public on their tax rights. This has fostered greater awareness and trust, with taxpayers feeling more secure in seeking redress from the institution.

Technological advancements have further revolutionized the adjudication process. The integration of paperless and remote hearing solutions, such as custom Zoom links, has made proceedings more efficient and accessible for taxpayers worldwide, benefiting individuals in the United States, Canada, Saudi Arabia, and China.

A recent case exemplifies this commitment: the FTO issued recommendations to the Federal Board of Revenue (FBR) on unjustified withholding tax deductions by the Punjab Council of Arts and Culture. The decision corrected tax practices to align with the Income Tax Ordinance, ensuring that low-income individuals were not burdened unfairly.

Furthermore, the FTO has taken a strong stance against FBR’s SRO 350(I)/2024, which inadvertently disrupted sales tax filings and business operations. The FTO has urged FBR to rectify these issues by simplifying filing processes, providing guidelines, and updating the IRIS system to support compliance without hindrance. The call for an automated system to recognize mutual transactions between buyers and sellers reflects the FTO’s commitment to convenience and fairness in tax administration, Jovindah said.

These developments underscore the FTO’s expanding role and renewed commitment to transparency, accountability, and the protection of taxpayer rights. Through decisive action and strategic reforms, the FTO continues to set new benchmarks for efficiency and fairness in Pakistan’s tax administration, Jovindah added.

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