The Income Tax Ordinance as well as the Sales Tax Act explicitly provide that a corporate entity, whether listed or not, would be registered with the RTO where its head office resides. But still the fate of many cases is hanging in the balance as both the FBR and the field officers are not ready to process their applications.
"Taxes are collected not because of, but despite the FBR," said one applicant, adding he had no clue when his case would be decided by the competent authority.
"My company was previously registered with the Large Taxpayer Unit (LTU) Karachi but now shifted to Lahore after a split in business. The FBR has surprisingly instructed the LTU Karachi to shift its jurisdiction to Lahore subject to "no objection" to the LTU Karachi," he pointed out. "I am running from pillar to post to persuade the functionaries at the LTU Karachi for early processing of the application but all in vain."
The tax experts had pointed out that the field officers had no discretion of denying the change of jurisdiction after a change in the company address. But still the field offices adopt delaying tactics on such applications, he added.
Meanwhile, a few more cases have been surfaced in the RTO Faisalabad region where the field officer has even refused to refer such cases to the FBR, saying that 'let the FBR summon report.'
The field officers, when contacted, stated that they may miss revenue target in case they process the applications relating to change of jurisdictional control. However, they had not sufficient answer when pointed out that it makes no difference whether the revenue target is collected by one of the other officer.
The tax experts said FBR used to take pride of undergoing reforms for simplifying laws and procedures but it had hardly taken any step to implement even the simplest statutory provisions such as deciding the issue of jurisdiction. The revenue was a product of economy or business and how the collection could be improved when a businessman's general problem was not addressed timely, they added.
Another fiscal expert pointed out such an adamant approach has virtually slide down the ranking of Pakistan on the ease of doing business index.
Like the jurisdiction, at times there are changes in the title or the name of a proprietor, partner and director. The law provides that in this case the concerned person has to make application to the concerned LTU/RTO. Interestingly, no such provision has been given in the official software meant of processing the registration of change in particulars. One simple solution, which by itself is quite ridiculous, is that one would have to apply for a fresh registration.
Copyright Business Recorder, 2017