Islamabad, May 8, 2024 – The Federal Board of Revenue (FBR) has rolled out new guidelines aiming to enhance the regulatory framework for the collection of sales tax and federal excise duty (FED) through the attachment of taxpayers’ bank accounts.
This latest development requires field offices to obtain prior approval from designated committees before proceeding with bank account attachments, marking a significant move towards safeguarding taxpayers’ rights and ensuring due process.
Under the fresh directives issued to all Chief Commissioners of Inland Revenue (IR), the FBR has mandated the formation of field committees, responsible for approving any actions related to the attachment of bank accounts for recovering sales tax or federal excise duty. These committees are to be composed of two senior Commissioners and chaired by the Chief Commissioner Inland Revenue.
The reinforced procedure, as detailed by the FBR, indicates that bank account attachments under section 48 of the Sales Tax Act, 1990, in conjunction with rule 71(2)(b) of the Sales Tax Rules, 2006, or rule 60(1)(b) of the Federal Excise Rules, 2005, can only proceed in the absence of any legal stay from a court or if no restraining order by the Commissioner IR (Appeals) or the Tribunal exists. The move underscores FBR’s commitment to respecting legal boundaries and the judicial appeals process.
Further emphasizing the importance of lawful procedures, the guidelines instruct Zonal Commissioners to ensure that all actions taken under their jurisdiction are consistent with legal standards. Notices issued to taxpayers must be served properly as mandated by law, and decisions regarding tax obligations should be made only after taxpayers have had sufficient opportunity to be heard.
Moreover, the directives clearly state that no recovery efforts should proceed in the presence of a restraining order or a stay order affecting the recovery measures. If such orders are received after the initiation but before the actual recovery of tax amounts, all actions must be halted immediately. This regulation aims to prevent undue hardship and financial distress to taxpayers who may still be contesting their tax assessments legally.
In cases where the tax office considers elevating matters to higher judicial platforms, the Zonal Commissioners are urged to exhibit prudent judgment, especially when the issues involve questions of law. This is intended to ensure that the cases forwarded for higher legal scrutiny are meritorious and hold substantial legal weight, thereby avoiding frivolous legal battles and reducing the burden on the judicial system.
The introduction of these new guidelines by the FBR reflects a structured approach to tax collection, emphasizing fairness, legal compliance, and administrative efficiency. By implementing these changes, the FBR not only aims to streamline the process of tax recovery but also seeks to fortify the trust between taxpayers and the tax administration by ensuring that all recovery actions are taken within the bounds of law and good governance.
