Karachi, November 24, 2024 – The Income Tax Ordinance, 2001, empowers the Federal Board of Revenue (FBR) to arrest individuals involved in income concealment, enhancing its authority to tackle tax evasion effectively. Section 203B of the updated ordinance outlines the powers and procedures that the FBR can exercise in such cases.
Under Sub-Section (1) of Section 203B, the FBR may arrest taxpayers if evidence from audits shows that income concealment has led to tax evasion of Rs. 100 million or more for filers and Rs. 25 million or more for non-filers. This step requires written approval from a committee comprising the Minister for Finance and Revenue, the Chairman of the FBR, and the senior-most member of the FBR.
The Sub-Section (2) establishes this committee as a key mechanism to ensure that the FBR exercises its powers responsibly and with proper oversight.
Arrests conducted under the ordinance must comply with the Code of Criminal Procedure, 1898, as stated in Sub-Section (3). This ensures that the FBR operates within legal frameworks while taking enforcement actions.
Sub-Section (4) allows the Chief Commissioner, with prior approval from the FBR, to compound offences in specific cases. If the taxpayer pays the due tax amount along with surcharges and penalties, the FBR may resolve the matter without proceeding to court. This provision highlights the FBR’s role in providing flexible solutions while maintaining accountability.
In cases involving corporate offences, Sub-Section (5) authorizes the FBR to hold company directors or officers personally liable for actions contributing to income concealment. However, such arrests do not absolve the company of its financial liabilities, including taxes and penalties.
The FBR’s enhanced powers under the Income Tax Ordinance aim to strengthen its efforts in combating tax evasion and promoting compliance. These measures reinforce the FBR’s role in ensuring taxpayers meet their legal obligations while addressing financial irregularities.
By leveraging its authority under Section 203B, the FBR continues to demonstrate its commitment to building a transparent and accountable tax system, ensuring that both individuals and corporations contribute their fair share to national revenues.
