Business, Taxation

Business premises: raids must have prior approval of FBR chief: Senate panel

The Senate Standing Committee on Finance has recommended that no raids should be conducted at business premises without seeking prior approval from the chairman Federal Board of Revenue (FBR), after the chambers and trade associations complained of facing harassment at the hands of tax officials. A meeting of the committee was held Thursday in the chairmanship of Senator Saleem Mandviwalla to listen to the grievances of chambers and trade associations regarding discretionary powers of the Inland Revenue offices under sections 83A, 38B, 40A, 40B, 176 and 177.

The representatives of different trade bodies said that raids are conducted on the business premises and bank accounts of registered persons are also being attached for withdrawal of money without following due procedure. Lahore Chamber of Commerce and Industry President Abdul Basit complained that field officers of FBR are conducting raids on business premises along with media persons to give an impression of apprehending a thief. This, he continued, sends a very negative message to the importers who are very sensitive and “say they can not work with a thief.”

Moreover, he said that FBR is attaching accounts of registered persons for withdrawal of money without following due procedure. He suggested that raids should be stopped. President Peshawar Chamber of Commerce and Industry, Haji Muhammad Afzal said that FBR is misusing the powers of above-stated sections. He said that the powers of these sections are being misused because these are not clearly specified and RTOs” powers are being misused by “inspectors and even Naib Qasid.”

Saleem Mandviwalla and members of the committee asked the representatives of the trade associations, “You have to stand up for your rights. The situation has worsened to this extent because you never stood up for your rights.” Maqsood Butt of garments sector stated that the sector”s share is almost 40 per cent in the textile but this sector did not get differential of 2013-14 and 2014-15. He further added that of Rs 120 billion package for textile sector, Finance Ministry has released only Rs 1 billion for two months against the requested amount of Rs 12 billion.

The president of Islamabad Chamber of Commerce and Industry said there are so many complaints of small traders against tax officials. He complained that FBR issued 4 million NTN numbers after the traders provided it their data, lamenting that number of tax payers has not increased in recent years and as a result existing taxpayers are being burdened to achieve the revenue target set in the budget for the current fiscal year.

When the committee asked the representatives to explain their grievances against the FBR openly as this was the purpose and agenda of the meeting, some representatives of trade associations and chambers stated that 70,000 cases of zero-rated were turned down by the FBR and office of the ABAD chairman was raided.

Former Chairman, Karachi Chamber of Commerce and Industry, Haroon Farooqui said that KCCI proposals of 2016 should be considered as its proposals for the next fiscal year and cases in litigation should be sent to the Alternate Dispute Resolution Committee (ADRC) for clearance.