KARACHI: An own motion investigation was initiated by FTO in terms of section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), on evidence based information that some of the most meaningful and innovative initiatives of FBR’s own individual officers and field formations stands diluted and washed away due to systemic follow up failure, ineptitude and incompetence, frequent posting transfers of officers and massive changes of jurisdictions.
Through its In-House Analysis, FTO Secretariat has also identified that though FBR and its dozens of field formations maintain an organized web portal, rich data center, exhaustive Data Bases, elaborate and comprehensive operational soft wares and houses a full-fledged & home grown IT support system i.e. Pakistan Automation (PVT) LTD (PRAL), yet neither FBR HQs nor its any single field formation maintains;
a. any IT based tracking system, archiving various valuable initiatives ventures made by different FBR’s organizations, officers, teams or specially created cells from time to time.
b. any exhaustive, fool proof and IT enabled handling over module (from predecessors to successors) for such initiatives.
c. any institutionalized internal follow up system, or
d. any internal evaluation mechanism to gauge whether the goals envisaged under FBR’s flagship ventures have been logically pursued achieved.
Therefore in most of the cases the good job done is prone to be wasted, diluted or compromised with transfer of individuals, dissolution of units/ cells and take over by new managers.
While conducting the aforesaid In-House Analysis FTO Secretariat focused 34 potential cases of tax evasion wherein detailed Investigation Reports with a Case Study were prepared shared by Directorate General (DG), BTB FBR in December, 2018,with the concerned field formations of FBR.
Subsequent action against Resident companies/ concern international contractors for not declaring true particulars of their receipts/ income and not discharging their responsibilities as withholding agents in the light of this initiative could have significantly augmented the national revenue.
However in 2019, FBR management suddenly shelved this whole BTB regime overnight; disbanding BTB Zones Islamabad, Lahore and Karachi. Office of DG BTB was relegated to a ceremonial entity assigned as additional charge. Thus in addition to loosing an effective organization, the repository of the whole above data/information was suddenly rendered extinct. This kneejerk attitude of FBR’s reflects caused a massive loss to the state exchequer.
Taking OM cognizance of this clear maladministration in terms of section 2(3) (ii) of FTO Ordinance, 2000, FTO office revived the dead proceedings by sharing diluted investigation Reports afresh. These fresh proceedings conducted by FTO office have thus far produced quite revealing results;
i. Income tax demand over Rs. 660 millions has been created in six (06) such cases, taken up afresh by FBR's concerned field formations.
ii. In majority of cases earlier information disseminated by DG BTB in 2018 was admittedly wasted, shelved, lying dormant or even lost.
iii. Tax demand created thus far is mainly default u/s 161/205. Normal assessment proceedings based on shared information may result in creation of equally substantial tax demand.
iv. All the basis triggering the instant OM stand established.
v. Due to ineptitude, incompetence of FBR's functionaries and delay caused in the these cases ever since 2018 has resulted tax proceedings barred by time in a number of cases for a number of Tax Years; another blow to the state coffers.