ISLAMABAD: The Federal Board of Revenue (FBR) faces criticism for failing to defend its case before the Federal Tax Ombudsman (FTO) regarding the mandatory integration of businesses with its online system.
This policy has reportedly imposed significant costs on taxpayers, requiring retail outlets to adopt the FBR’s computerized system.
The FTO has also initiated an investigation into alleged privacy violations of taxpayer data. The investigation stems from a complaint filed by a Lahore-based taxpayer through advocate Waheed Shahbaz Butt, challenging the enforcement of SRO 428.
The complainant argued that the FBR has overstepped its authority by mandating the use of a private company to manage taxpayers’ fiscal data without adequate safeguards for privacy.
Records indicate that the FBR has yet to submit comments addressing the allegations despite repeated reminders. The investigation is expected to bring relief to taxpayers struggling to comply with the FBR’s requirements and could lead to significant changes in the agency’s policies and practices.
The complainant also referenced a Supreme Court decision (PLD 2021 SC1) that directed disciplinary and criminal proceedings against tax officials who violated section 216 of the law, which ensures the privacy of taxpayer data. He questioned how a private company could be authorized to access, manage, and use sensitive fiscal information under the guise of online integration, highlighting concerns over favoritism and potential misuse of authority.
The taxpayer urged the FTO to recommend that the FBR provide complete documentation, including standard operating procedures, data flow charts, and legal justifications for nominating a single private company for point-of-sale activities nationwide. He also called for transparency regarding the selection process, the costs imposed on taxpayers, and comparable practices in other countries to ensure there is no favoritism or nepotism in the FBR’s actions.
The outcome of the FTO investigation could have far-reaching implications for the FBR’s approach to online integration and its handling of taxpayer data, potentially reshaping its operational framework.
