Tax experts at Tola Associates and Tola & Tola have raised concerns regarding numerous amendments introduced through the Tax Laws (Amendments) Bill, 2024. They argue that several provisions within the Bill conflict with fundamental constitutional rights, rendering them problematic from a legal and practical standpoint.
Among the contentious amendments is the definition of an “eligible person” and the imposition of restrictions on taxpayers. Experts assert that these provisions may violate Articles 18 and 23 of the Constitution of Pakistan, which guarantee the freedom of trade, business, and property ownership. For instance, requiring individuals to include property in their wealth statements at a fixed cost of PKR 100 is seen as unreasonable and contrary to constitutional protections related to property rights.
Another significant point of contention is the restriction on cash withdrawals beyond a threshold prescribed by the Federal Board of Revenue (FBR). This measure, experts argue, is impractical and violates Articles 18 and 23. Businesses operating in remote areas, where internet banking is inaccessible, may need to withdraw cash for essential expenses such as salaries and lodging. The inability to do so could severely hinder their operations. Legal precedent from the Supreme Court of Pakistan reinforces the principle that taxpayers have the right to manage their affairs within the bounds of the law without undue interference.
Furthermore, the amendments also extend discriminatory restrictions to non-resident persons, which tax experts believe contravene Article 25 of the Constitution, ensuring equality among citizens. For example, subjecting non-residents to resource verification requirements and imposing limits on property transactions could disproportionately affect their rights and interests.
Section 175AA of the Bill, which allows the FBR to access taxpayer information from banks, has also drawn criticism. Experts contend that this provision infringes on Article 14 of the Constitution, which upholds the right to privacy. The absence of a clearly defined degree of variance for discrepancies further exacerbates concerns, as even minor mismatches could lead to unwarranted data sharing.
Moreover, the amendments permitting third-party auditors to access taxpayer information pose significant risks. Tax experts warn that this could result in conflicts of interest, especially if auditors represent competitors, and undermine the taxpayer’s right to conduct business freely under Article 18.
The proposed amendments have sparked a heated debate, with experts calling for a thorough review to align the Bill with constitutional principles. Ensuring fairness and adherence to fundamental rights remains essential for maintaining public trust in the country’s taxation system.