KARACHI: Tax recovery via freezing of bank accounts has been prohibited by Federal Board of Revenue without prior serving of notices to offending taxpayers.
According to sources in Regional Tax Office Karachi, FBR on Thursday has initiated action against tax recovery via attachment of bank account without informing the taxpayers, an English Daily reported.
The tax watchdog noted, that Inland Revenue commissioners in some cases were making recoveries by sending notices to bank managers without informing the relevant taxpayers regarding freezing of bank account.
Section 140 of Income Tax Ordinance 121 permits commissioners of Inland Revenue to recover taxes from individuals. In a notice published by FBR, it mentioned controlling and supervisors need to assure before publication of notices for recovery under section 140, demand notices get properly served to concerned defaulting tax payer and payment due date has expired for resultant tax demand.
The notice highlighted any breaking of aforementioned rules would leave concerned commissioners being held responsible for their actions.
Also, FBR conveyed its anger over commissioners of Inland Revenue taking action for recovery of outstanding dues via freezing bank accounts of various taxpayers through a single notice.
The Chief Commissioners of Inland Revenue were instructed to get certificates from commissioners which are being followed and take action against its violation.
Taxpayers impacted by this development approached the FBR on various occasions and shared their sentiments regarding the problems of tax recovery via attaching banking accounts. The tax watchdog has been requested to put an end to this practice.
Furthermore, FBR was apprised majorly recoveries made were done without apprising taxpayers and in some cases recoveries were made despite being in litigation.