A meeting of the Senate’s Standing Committee on Finance was held in Islamabad under the Chairmanship of Senator Salim Mandviwala to discuss and address the issues and problems faced by country’s business and industrial community due to the unchecked discretionary powers acquired by FBR over the years and misused by the officers of Inland Revenue for harassment and extortion of registered taxpayers.
Senator Salim Mandviwala had taken serious note of the complaints voiced by representatives belonging to the trade industry as well as the taxpayers regarding the high-handed tactics and coercive approach of FBR. Henceforth, he invited all the chambers, associations and affected parties to attend the meeting of the standing committee in order to have a threadbare discussion in the presence of FBR officials and decide the future course of action to curtail the discretionary powers, while resolving other issues related to the taxation policy to alleviate the suffering of all.
Vice Chairman Businessmen Group and Former President KCCI Haroon Farooki, President Karachi Chamber Shamim Ahmed Firpo, Former Senior Vice President KCCI Muhammad Ibrahim Kasumbi, President Lahore Chamber Abdul Basit, President Islamabad Chamber Khalid Iqbal Malik, President KPK Chamber Haji Muhammad Afzal, President Gujranwala Chamber Saeed Ahmed Taj, Executive Member Gujrat Chamber Muhammad Naeem Imtiaz, Chairman Taxation Committee of Lasbela Chamber Iqbal Ismail and other representatives of numerous Chambers of Commerce and Industry and Trade Associations attended the meeting whereas the chairman as well as members of FBR and Senators from the ruling party and the opposition were also present on the occasion.
Chairman Standing Committee Salim Mandviwala expressed his dismay and concern over the large number of complaints received from representatives of business and community on the misuse of discretionary powers by the FBR along with the terrible and disrespectful treatment meted out to the tax-payers.
Speaking on the occasion, Vice Chairman Businessmen Group and Former President KCCI Haroon Farooki, who is also the convener of the Action Committee of all chambers, highlighted the core issue of discretionary powers delegated to the lower cadres of FBR and the harassment of taxpayers which has resulted in decline in number of taxpayers and failure to broaden the tax base. To meet the revenue targets, FBR has resorted to squeezing whatever’s left of the poor yet compliant taxpayers, already burdened with high rates of taxation and the mindboggling number of taxes.
He said that FBR officials were enjoying immense discretionary powers under Sections 25, 37, 37A, 38, 40, 40B and 48 of the Sales Tax Act and 114 (6), 165A, 165B, 122, 138, 175 (1)(2), 176 and 177.
Haroon Farooki further added that the report of Tax Reforms Commission (TRC), which incorporates major taxation policy reforms, was prepared after extensive deliberations with all the stakeholders and the recommendations of the report remain unimplemented. All chambers have, therefore, demanded the implementation of TRC report in the upcoming budget so that the powers of FBR could be curtailed.
On the occasion, President Lahore Chamber Abdul Basit, while fully endorsing the views and suggestions set forth by Haroon Farooki, said that the business community is not averse to paying taxes but the FBR should first focus on those outside the tax regime, rather than squeezing the compliant taxpayers. He said that practices such as raids on premises, freezing of bank accounts and withdrawing funds from taxpayers’ accounts have been counterproductive and proved detrimental to economic growth and business.
Though the Chairman FBR Dr Irshad Ahmad defended the position of FBR and denied charges of corruption in the RTO’s and field formations, Senator Kamil Ali Agha and Senator Ilyas Bilour stated that they themselves have suffered extortion at the hands of IR officials, rendering the former’s stance null and void.
The presidents of all the chambers along with representatives of trade associations endorsed the views and proposals to curtail and remove the discretionary powers which have caused more damage than benefit to the country’s economy.
After extensive deliberations, Chairman Standing Committee Salim Mandviwala assured the representatives of the business and industrial community that their issues and grievances will be taken up in the parliament and the discretionary powers, which are the root cause of corruption and harassment, will be removed with the onset of the Finance Bill for the year 2017-18.
He directed the chairman FBR that all raids on taxpayers’ premises must stop immediately. Any raids which are necessary should only be authorised by the chairman himself or Member-Operations FBR, in cases where a substantial amount of evasion is detected and is based on concrete evidence.
It may be recalled that a 6 member Action Committee, comprising office bearers of major chambers was formed recently at the conventions of All Chambers held in Karachi and Lahore, led by Vice Chairman BMG and Former President KCCI Haroon Farooki to counter FBR’s harassment and arm-twisting tactics. The action committee had taken up the burning issues faced by taxpayers and sought removal of FBR’s discretionary powers at all forums, including the Standing Committee of the Senate on Finance.
