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  • Nov 9th, 2017
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The Federal Board of Revenue (FBR) will take appropriate action against those whose names appeared in the Paradise Leaks after proper scrutiny of documents and details available in the said papers. "The FBR has not yet received complete details about those people whose names were reported in the Paradise Leaks," said Dr Mohammad Iqbal, Member FBR Tax Policy (Inland Revenue), while briefing the Senate Standing Committee on Finance, Revenue and Economic Affairs which met with Senator Saleem Mandviwalla in the chair Wednesday.

The FBR refused to withdraw Regulatory Duty (RD) imposed on import of over 700 items, saying it can be withdrawn only through the federal cabinet, the Member FBR added.

Dr Iqbal said that RD was imposed to reduce non-critical imports. The RD was imposed by the Cabinet after Commerce Ministry agenda was discussed for six weeks. The FBR official said that the RD is going to hurt some sectors, but it was imposed for reducing non-essential imports, adding that FBR does not agree to the contentions raised by these sectors.

The committee members stated let the import bill not to decrease because some items are required for the manufacturing industry and secondly the RD is hurting local industry. The FBR official said, "We have to decide whether they need critical items like edible oil and POL or non-critical items like air conditioner."

The committee further expressed annoyance over the amendments made in the Finance Bill after its passage from the Senate committee. The committee chairman said that 25 amendments were made in two days, after it sailed through the Senate which is not acceptable. The FBR assured the committee to avoid the practice in future.

Briefing the committee on the rules made under the Benami Act, 2017, the FBR official said that Benami Rules namely "Benami Transactions (Prohibition) Rules, 2017" were drafted and after vetting from the Law Division, the rules were submitted to the Cabinet through a summary for approval. The Cabinet referred the said rules to the Cabinet Committee for disposal of legislative cases (CCLC). Case is under process. The Member FBR said that they may bring additional amendments in the rules as in the current shape making it operational will not be possible.

While briefing the committee on compliance report by the FBR on the pending refund cases of the companies as recommended by the Committee, the officials said that a meeting was convened on October 18, 2017 with the companies to resolve their outstanding refund issues. The representatives of three companies attended the said meeting. Fourth company, whose refund issue is settled, was not invited. Necessary directives to the field formations were given in pursuance of discussion in the meeting.

The updated refund payment status in relation to four companies is as under:-In the first case, RPO was generated on 18th August, 2017 and payment has been made electronically on 31st October, 2017.

In the second case, taxpayer has stated that income tax refund claims of Rs 15.110 million for the tax years 2006 to 2016 is pending and till date he has not received any refund. In this regard it has been reported that out of total claim of Rs 12.651 million filed by the taxpayer for the year 2011 to 2016, cheque of Rs 7.685 million has been issued to the taxpayer and verification of remaining amount is under process. It is further reported that the taxpayer has not filed any application for income tax refund for the tax year 2006 to 2010, as such, processing of refund is not possible without application of refund claim. The taxpayer has been requested to file refund claims for the period 2006 to 2010.

In the third case, the taxpayer has stated that they received sum of Rs 6.99 million against income tax refund of Rs 21.216 million for the tax years 2012-2016. The field formation was directed that balance claims of the taxpayer be finalized by 31.10.2017. The field formation has now reported that proceedings in pursuance of Section 122(5A) of the Income Tax Ordinance, 2001, as well as withholding tax monitoring against the taxpayer is under way and once these proceedings are completed, legitimate refund due to the taxpayer will be paid.

In the fourth case, two refund claims are outstanding. In one refund claim, the claimant had sought a time period up to 05.10.2017. However, the field formation has reported on 03.11.2017 that partial record has been provided by the taxpayer. It is further reported that final notice for provision of record has been issued to the taxpayer as per directives of the FTO in the hearing on 01.11.2017.

In the second refund claim, one RPO dated 04.08.2017 had already been generated, and now the payment against the same has also been made as per "first-in, first-out" policy. As regards the deferred amount of this claim, the same has now become available to the field office for processing after the aforesaid payment. The field formation has been asked to process the claim and generate the second RPO within ten days.

The committee also considered private member's bill to prohibit the business and practices of private money lending and advancing loans and transactions based on interest (The Islamabad capital territory prohibition of interest on private loans bill, 2017) moved by Senator Sirajul Haq. The committee referred the Bill to Interior Ministry while saying the ICT comes under its jurisdiction.

The committee also considered the calling attention notice moved by Senator Hidayat Ullah regarding pending the approval of 7500 sanctioned new posts (SNEs) for FATA which have already approved by the FATA Secretariat and the Ministry of SAFRON.

Finance Ministry and FATA Secretariat officials informed the committee that Finance Division has agreed for creation of 1440 posts in the first phase for education and health sectors during 2017-18 and 2018-19. The remaining 853 posts for different departments of FATA secretariat will be considered in the 2nd phase, after completion of recruitment process in the 1st phase. The decision was taken due to financial constraints as it would require around Rs 3 billion per annum. However Senator Hidayat Ullah said that it is illogical to fill the posts in high schools and colleges while posts in middle schools remain vacant. He further said that government has money for metro bus projects but not for FATA which has been hit hard by militancy and terrorism. The committee directed the Finance Division to sit together with Hidayat Ullah and resolve the matter.



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