KARACHI: Federal Board of Revenue (FBR) has been urged to stop raids by Directorate of Intelligence and Investigation and their focus should be on new taxpayers instead existing taxpayers.
Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 pointed out misuse of powers by tax officials under Section 38B of Sales Tax Act, 1990.
The chamber said that such raids and surprise inspections of compliant/registered taxpayers premises without any prior notices or intimations, only harass tax payers and open doors for heavy under table money or bribes leading to heavy corruption. Besides it works as deterrent for other to be documented and register in Sales Tax or Income Tax.
The KCCI said that such departments or cells should only focus on unregistered persons engaged having undeclared assets and undocumented business activities of high volume and register them in the tax net rather than raiding, inspecting or sending notices to already registered persons who burdened with numerous amounts of taxes and complying with taxation rules and procedures.
These powers under Section 38B should be withdrawn or amended to only for broadening of tax base. Uneven and flawed Tax structure of Sales Tax, Value Added Sales Tax and Further Tax are the root cause of problems and should be reformed in way that compliance for registered persons is easier and raids are not required.
Giving rationale of the suggestion, the chamber said that it will help in prevention of harassment of compliant taxpayers. Besides it will help in broadening of tax base and eliminate corruption.