Declarations under amnesty scheme: FTO tells FBR to facilitate taxpayers who missed deadline

ISLAMABAD: Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to facilitate thousands of taxpayers in filing of declarations under the amnesty scheme (Assets Declaration Ordinance 2019), who deposited billions of rupees as tax, but unable to upload their declarations on the last date, ie, July 3, 2019 due to failure of the FBR's IT system.

In this regard, the FTO has issued a landmark judgment (0011/OM/2020) here on Thursday to give relief to the aggrieved persons availing the amnesty scheme. The FTO has recommended the FBR to make arrangements and facilitate the filing of declarations in respect of all the aggrieved persons by invoking the provisions of Section 17 of the Income Tax Ordinance; update the IT system of the FBR which requires thorough review and efficient improvement and report compliance within 45 days.

Federal Tax Ombudsman on own motion and on various petitions of Amnesty Declarations represented by Pakistan Tax Bar Association, who deposited the due taxes for availing Amnesty Scheme but could not file the declarations as per law due to failure of FBR IT system IRIS on last date of Amnesty Declaration 2019, as on July 3, 2019, has declared inefficiency, Incompetence of the officials of FBR while designing the IT system to fulfill the needs of Public availing the Amnesty Declaration Ordinance 2019.

According to the findings of the FTO, inefficiency, negligence and incompetence of the Department officials in designing the system making adequate arrangements and failure to give full effect to the provisions of the Ordinance does amount to maladministration in terms of Section 2(3)(ii) of the FTO Ordinance, 2000.

The order of the FTO issued here on Thursday revealed that an own motion investigation was initiated while exercising powers conferred u/s 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) on the complaint of delegation of office bearers of Pakistan Tax Bar Association (PTBA) to the FTO, alleging that thousands of taxpayers/persons who intended to avail the benefit of Amnesty Scheme, promulgated by the Govt of Pakistan, as Assets Declaration Ordinance, 2019 (the Ordinance) deposited billions of rupees of tax but were unable to upload the declaration of assets, on the last date i.e. 03.07.2019, due to failure of IT system of the Department (Dept).

The Dept had failed to pre-empt this situation, where generation of CPR should have been subject to uploading of the declarations. In that situation, no such anomaly would have arisen, wherein thousands of declarants who paid billions of rupees in tax had been misled. Again gravity of the situation had not been evaluated because the tax so deposited was neither refundable nor adjustable, FTO said.

The emphasis of the Dept that the tax chargeable of the declaration was not the requirement of the Ordinance, appears to be vague. It was responsibility of the Dept to keep the system running smoothly till the last minute but unfortunately, it failed to cater the needs of the declarants. The general public had suffered because of the inadequate arrangements made by the FBR to address the expected load on its system.

Since the department has failed to ensure smooth functioning of its IT system to facilitate the prospective declarants, to avail the amnesty scheme by uploading their declarations on the last date. Therefore, it amounts to incompetence and inefficiency. On part of the FBR officials, the FTO stated.

The record reflects that thousands of declarants paid tax of Rs.2.6 billion. up till 03.07.2019. Almost a year has elapsed but the Dept has taken no measure to address their grievances. The Dept has been well aware of the failure of the system in giving effect to the scheme. Therefore, it was imperative upon the Dept to remove that difficulty/anomaly by invoking the provisions of Section 17 of the Ordinance. In light of the above stated discussion; inefficiency, negligence and incompetence on part of the FBR officials is established, the FTO order added.

Copyright Business Recorder, 2020