ISLAMABAD: The government after a gap of 1.5 years has eventually reinstated powers of the Director General Intelligence and Investigation (DGII) to undertake criminal prosecution against tax dodgers.
In a judgement of the Lahore High Court (LHC) in July 2017, the statutory regulatory order (SRO) 116, which permitted the DGII to carry out an investigation into sales tax evasion was declared unlawful, reports Dawn.
The official spokesperson at the Federal Board of Revenue (FBR) Dr Muhammad Iqbal said as per the new notification SRO 1301 the DGII will be granted powers which were not limited by the LHC judgement in July last year.
Mr Iqbal said small tweaks were made in the SRO1301 to eliminate powers like blacklisting of a taxpayer, which were mentioned in the LHC judgement.
But the FBR spokesperson said under the new orders, the DGII would have the authority to raid a business, carry out investigations and make arrests.
After the LHC judgement, the previous registered FIRs and criminal prosecution which were under process had been sidelined and quashed.
Also, to provide legal protection to previous decisions, the government via the Finance Bill 2018, inserted section 30A in the Sales Tax Act 1990 whereby granting powers to DGII to carry out an investigation into dodging of sales tax.
In respect to the previous cases including lodging of FIRS, a validation Section 74 was suggested to the Sales Tax Act 1990.
With these revisions, the validation section gives legal protection to the orders of DGII in retrospect even before these powers were granted via the Finance Act 2018.
According to the new notification, DGII Inland Revenue can undertake intelligence activities on all tax linked problems which include under-reporting, tax dodging, tax fraud and revenue leakages.
And the department will be amassing third-party information linked to financial transactions like investment, expenses and details of individuals.
This will permit to develop linkages with all national, provincial and other databases to collate and collect appropriate information.
Now, the grant of these power will permit to find and scrutinize in compliance with relevant laws in cases of tax fraud having any financial implications and punishable as an offence.
