The Federal Tax Ombudsman (FTO) has issued a directive to the Federal Board of Revenue (FBR) to refrain from changing the jurisdiction of taxpayers without their consent and to resolve the pending cases of jurisdictional disputes among various field formations.
FTO takes notice of taxpayers’ complaints
The FTO took notice of the complaints filed by the taxpayers who alleged that the FBR had arbitrarily changed their jurisdiction without informing them or obtaining their approval. The complainants claimed that this had caused them inconvenience and harassment, as they had to deal with different tax offices and authorities for different tax matters.
The FTO observed that the FBR had violated its own policy and rules regarding the jurisdiction of taxpayers, which were issued in 2019 and 2020. According to the policy, the FBR had to assign the jurisdiction of taxpayers on the basis of their business address, nature of business, and tax profile. The FBR also had to inform the taxpayers about their jurisdiction and obtain their consent before making any changes.
The FTO found that the FBR had failed to implement its policy and rules properly, and had changed the jurisdiction of taxpayers without following the due process. The FTO also noted that the FBR had not updated its IT system to reflect the changes in the jurisdiction, which had created confusion and inconsistency in the tax records and data.
FTO directs FBR to streamline IT process and ensure timely assignment of cases
The FTO directed the FBR to streamline its IT process and ensure timely assignment of newly-registered cases to their proper jurisdiction. The FTO said that the pendency of cases due to non-assignment of the same was tantamount to maladministration.
The FTO also pointed out that more than 65000 cases were unassigned and lying in Corporate Tax Office (CTO) portal in the wake of split of one regional tax office (RTO) into three RTOs. The FTO also took strong exception to the discrepancies in the Pakistan Revenue Automation Ltd. (PRAL) system, which had automatically entered all new registered cases in CTO without differentiating the dead cases from the live ones.
The FTO said that this was a clear case of neglect, inattention, delay, incompetence, inefficiency and ineptitude, in the administration or discharge of duties and responsibilities causing huge loss of revenue on the part of the FBR IT wing and PRAL.
FTO recommends FBR to develop and enforce an efficient system for resolution of jurisdictional issues
The FTO recommended the FBR to develop and enforce an efficient system for resolution of jurisdictional issues among various field formations. The FTO said that the FBR should follow its policy and rules regarding the jurisdiction of taxpayers and respect their choice and convenience.
The FTO also suggested the FBR to create a mechanism for redressal of grievances and complaints of taxpayers related to jurisdictional matters. The FTO said that the FBR should provide a platform for taxpayers to communicate with the tax authorities and seek clarification and confirmation of their jurisdiction.
The FTO also advised the FBR to conduct awareness campaigns and seminars for taxpayers and tax officials to educate them about the policy and rules of jurisdiction and the benefits of having a uniform and consistent jurisdiction.
FTO orders FBR to comply with its recommendations within 45 days
The FTO ordered the FBR to comply with its recommendations within 45 days and report back to the FTO office. The FTO warned the FBR that if it failed to comply with its recommendations, the FTO would initiate contempt proceedings against the FBR officials.
The FTO also appreciated the cooperation and assistance of the FBR officials during the investigation and hearing of the complaints. The FTO hoped that the FBR would take the necessary steps to improve its performance and service delivery and to facilitate the taxpayers.
