Daily Times

No country becomes welfare and prosperous state unless it would have managed all its financial requirements both on administrative and development sides within its own resources. Pakistan since its inception has been facing the problem of deficit in collection of tax and resultantly the govt has to borrow loans both internally and internationally. Further, due to lack of available resources, there is always a shortage in kitty for the government to spend money on the welfare of its citizens.

There are so many reasons for the deficit in tax collections in Pakistan and much has been written on it. Only the courts cannot blame for such pendency, there are many factors as well. Recently the Federal Cabinet has also highlighted the issue of a huge backlog of revenue cases and showed his great concerns relating to revenue matters amounting trillion of rupees. One of the reason of deficit in collection is large number of cases counting in thousands pending before Supreme Court, High Courts , Tribunals and before Commissioner Appeals Inland Revenue and Collector Appeals (Customs) which involving billions of Rupees Revenue is stuck up due to protracted litigation and such situation has now become big challenge now only for FBR but also for courts and government, thus this situation required immediate and urgent strategy by coordinating all stakeholders with positive way ford. Due to such immense workload within FBR, the quality of decision making sometimes professionally becomes difficult and has become a big challenge for the Federal Board of Revenue because they have to bank upon the input from field tax formations.

There are big capacity issues as well within FBR and Tax Offices to manage litigation backlog which need to be improved on priority bases to address the issue of backlog and proper representation before Superior Courts and before adjudicating tax forums. Some time large numbers of cases are pending due to lack of knowledge about new judgements of superior courts on identical tax propositions. Another aspect of this backlog and waste of time & energy is frivolous litigations by either side including tax payers. It is important for improving the present situation of tax backlog and pendency in Courts, there is urgent need of streamline the procedure of final assessment of taxpayers and to improve adjudication process including to make good coordination among legal representatives and field formations at all stages of hearings and for effective monitoring the timely disposal of cases as prescribed by tax laws and to further decide through clubbing of similar tax matters and legal propositions before Supreme Court and High Courts. Another reason for weak legal management of tax cases is there is no reward scheme for FBR officers and officials to encourage them for making successful income amended assessments that come out from the courts in favour of FBR.

It is important as well to implement the mandatory timeline to decide tax cases by every adjudicating forum under the relevant tax law and to request the Supreme Court and High Courts as well to suitably amend their Rules and Orders. There is also a need to design a strategy to prioritize the litigation relating to tax positions and its revenue and legislative impacts, and for addressing and implementing quarterly meetings of all the relevant forums and courts should be held.

It is also essential to immediately establish Special Litigation Management Resource Centre headed by an appropriate tax and corporate expert who have well experience on tax litigation matters at FBR HeadQuarters with having automated linkages with field formations and should apply Automated Legal Management system (ALMS) application that ensures Online Status Develop Automated Litigation Management System of all pending litigation cases involving revenue impact at all appellate fora including Supreme Court and High Courts.

It is also important to highlight first of all cases and special measures be adopted against the Stay Orders matters granted in revenue matters by Superior Courts as per Article 199 of Constitution where statutory period of six months has elapsed. FBR should make a strong legal strategy to highlight revenue yielding cases and sectors to the field formations and remove impediments for its early disposal in order to achieve revenue targets. The role of ADR is also very important for early resolution of long awaited tax matters and the system in this regard be immediately designed to Stream lining the tasks of Alternative Dispute Resolution Committees and its effective monitoring as suggested and mentioned in all tax laws (Customs, Federal Excise, Sales tax, and Income tax laws). Reward system for FBR officers & officials is also important and it should be implemented whose amended assessment orders stand the test of appeals, stage wise and before Superior Courts.

It is also important that as the Federal govt has constitutional power to legislate Finance Bill in every year and to present it before Parliament, thus it is important instead only to go for tax collection amendments, should also introduce such amendments in law which create the complete automation environment within FBR and for adjudication, build trust among taxpayers, minimise tax officials discretion, ending so many tax regimes and to simplify the tax collection procedures in Pakistan. Also it is important; the federal govt should also suitably amend the tax laws as per observations and judgments of Superior Courts through new tax legislation. Honestly, there is urgent need to complete overhaul the tax system of Pakistan through independent tax experts who have the knowledge, the ground reality and background of the working and administrative system of Pakistan starting from tax legislation, tax automation, tax administration, tax collection, tax adjudication and of treatment and elimination of different tax preferential regimes in Pakistan.

It is also important now to take immediate steps with good legal management strategy as the new jurisdiction has been vested with FBR for Benami and Anti money laundering laws, thus special strategies are needed and implemented for investigation and courts litigation otherwise the spirit of these laws would never be achieved. Only highlighting the tax problem is not the resolution but it the strategy to make first to address such complexes tax propositions by inviting at top level to all stakeholders which are courts, tax experts, FBR officials and tax payers and to improve independent and transparent adjudication mechanism and then finally to go with effective time implementation through independent and neutral tax experts.

The writer is Advocate Supreme Court of Pakistan and has more than 22 years of legal standing. He can be reached at: hafizahsaan47@gmail.com.