The Federal Tax Ombudsman (FTO) office says that refund related complaints are the main issue of taxpayers in Pakistan as 59 percent of total complaints received by FTO in 2018 were related to income tax refund claims, which is more than all other categories of taxes put together.
According to the FTO Annual Report – 2018, during the year under review, 1918 complaints were received, 241 complaints were carried over from previous year, 179 cases were added through own motion action. Out of total of 2338 complaints, 1880 were disposed of either at initial stage or after investigation.
Intervention of FTO is greatly helpful in expediting settlement in delayed refund cases of the business community. Timely payment of refund claims is important to maintain liquidity in the business, said FTO.
The FTO claimed to have got released over Rs 6.89 billion tax refunds of exporters pending with tax authorities as a result of orders passed by FTO in 2018, as against Rs 3.2 billion in 2017. Total 711 refund cases were handled by FTO in 2018.
The FTO said action already taken on own motion (Suo-moto) has revealed positive results in some cases to plug hemorrhage of revenue, and identification of failure of FBR in acts of omission or commission. Therefore, this office intends to act on credible information to initiate as many investigations as possible for promotion of transparent Tax administration.
In order to encourage Taxpayers to e-file Income Tax returns for claiming adjustment of adjustable Withholding Taxes, FTO has proposed to FBR that gradually all adjustable Withholding Taxes, excluding those on salary income, might be enhanced by at least 20 percent in the coming budget.
It was also proposed by FTO that all current non-adjustable Withholding Taxes may be converted into adjustable Withholding Taxes by amending the relevant provisions of the Income Tax laws/rules.
Also, in order to provide full relief to Taxpayers under section 122A of Income Tax Ordinance, 2001, it was proposed that a Taxpayer should be given the right to approach the Commissioner for the revision of assessment, as was available under original section 138 of the Ordinance.
Income from pension was exempt from Income Tax, but pensioners were not eligible to avail benefits of provisions of Withholding Tax unless they were on Active Taxpayers List. It was therefore proposed that pensioners deriving income from pension only, be exempted from the provisions of Withholding Taxes applicable to non-filers sales tax.
FTO proposed that the Adjudicating officers should be removed from subordination of FBR. All Appellate Forums to work under the Ministry of Law and the Tax judicial system be given under the control of Member Judicial, who should be a retired Judge of the apex court.
Also, a mobile application has been developed for registration of complaints, through which complainants can register their complaints from their Android, Windows and Apple based hand held devices, and also check status of their complaints using the same mobile App.