Tax authorities collecting Rs1trn less revenue: FTO

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KARACHI: Dr Shoaib Suddle, Federal Tax Ombudsman (FTO), has said that the performance of taxation authorities is negligible and, given the size of Pakistan’s GDP, they are collecting around Rs1 trillion less revenue than they ought to.
The FTO said that the tax-to-GDP ratio was recorded at 13.5 percent in 1987 but, at present, has fallen to slightly over eight percent.

“This means the reform programme and other structural changes only reversed revenue collection,” the FTO said at a meeting with members of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday.

Less than one percent of the population is paying income tax and the tax-to-GDP ratio is also on the decline, he said, adding that 95 percent of the tax officials are corrupt. “The FBR should be restructured,” he added. Dr Suddle said that taxpayers’ complaints are on the rise, despite reduction in the pendency by the FTO. The ratio of decision in favour of the taxpayers is 85 percent, which shows maladministration of the FBR officials, he added.

To address the grievances of the taxpayers and to provide speedy justice in tax matters, certain changes have been introduced in the FTO laws, he said, and highlighted major changes, in which the president of Pakistan would decide tax issues in representation made before him in 120 days.

To further make the system hassle-free, the representations will go directly to the President Secretariat instead of the ministry of law, Dr Suddle said.

In case of an emergency by the taxpayer, the FTO will immediately grant stay, he said, adding that the application of the taxpayer will be finalised within 60 days. He said that the decisions taken by the FTO have never been circulated among the FBR officials to reduce the problems of the taxpayers.
The FTO would handle the FBR strictly and after changes in the laws, the FTO has been authorised to invoke the power of contempt and implement the same within 30 days.

About the statutory regulatory orders (SROs) issued by the revenue body, Dr Suddle said that the issuance of SROs should be stopped because it is against the constitution. “It is an act of parliament and let legislators decide the matters,” he said.

On the issue of tax matters of parliamentarians, he said that the Election Commission has incorporated the recommendations sent by the FTO. These recommendations included the national tax number, tax returns of the last five years, no demand of certification from the FBR and provincial revenue authorities and the agriculture tax.

The FTO made strict remarks over the amnesty schemes and said that when the revenue body has the data of 300,000 people why it was not taking action against them and talking about giving amnesty to them for the purpose of documentation. “Amnesty is clear licence to dishonesty,” he said.

He stressed the need to clean bureaucracy, which proposes such ideas.

About the post of the FBR chairman, Dr Suddle said, the FBR chief should hold powers equivalent to the sitting minister and he should act without any pressure. The FBR was under pressure and that is why in many cases it failed to take any action. “Why the FBR is not collecting taxes from markets in Karachi?” He questioned.


Courtesy: The News

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