New wave of raids at business centres: LCCI flays misuse of discretionary powers by FBR

By: HUMZAH REHMAN

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has expressed grave concern on a new wave of raids at business premises by the staff of Federal Board of Revenue (FBR) despite clear instructions of the Lahore High Court (LHC).

In a statement, LCCI President Malik Tahir Javaid and senior VP Khawaja Khawar Rashid said that FBR staff has again started misuse of Section 38-B and 40-B of Sales Tax Act, 1990 against the business community. They said that LHC has barred FBR from conducting raids at business centres, but the latter has ruined the court’s order.

They said that businesses are already in a complicated state-of-affairs, while anti-business actions against business community are not only adding to the miseries of the business community but are also promoting trust deficit between the government and the business community.

The LCCI office-bearers said that misuse of section 38 and 40-B is grinding the business community. Prime Minister Shahid Khaqan Abbasi should take notice of the situation immediately otherwise, FBR staff would cause huge damage, not only to the business activities but to the government’s reputation as well, they said.

They said FBR staff is visiting markets and business premises to “unjustifiably harass” the business people. The LCCI office-bearers further added that FBR should stop harassing filers, as non-filers and ones outside the tax net are not accounted for at all, which discourages businesses to come into the tax net.

Registered businesses are required to comply with various departments involving a lot of financial and time resources, whereas unregistered businesses are free from all such hassles, they maintained.

They said that attaching bank accounts for recovery of outstanding dues is also hampering business growth and tarnishing the business-friendly image of the government. They said that bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of commissioner in the light of reply submitted by the taxpayer. The recovery should be after the decision of the tribunal and not before that, they added.

They said that instead of focusing on controlling under-invoicing, curbing smuggling and expanding the tax net, the FBR seems to be inclined to pressurise registered taxpayers, who are already suffering due to a high rate of sales tax, income tax, and custom duties by creating fictitious cases for recovery of outstanding dues to meet revenue target.

Meanwhile, talking to Pakistan Today FBR’s Commissioner Jahangir Ahmed rejected the allegations, saying without a reason FBR teams do not harass businesses, as visiting the business premises is just a routine work, not raids. Moreover, he said, “If we find any delays in the completion of the documents, we give them time to complete their records, but we cannot close our eyes and let them do whatever they want to do in the head of irregularities; we try to verify the goods according to record and documentation.”

He went on to say that “we, as a team, do everything after the consultation with FBR chief commissioner, along with proper investigation. As of now, no one has given us any proof of misuse of discretionary powers by FBR or Section 38-B and 40-B.”