FPCCI Advocates for Corruption-Free Taxation System in Pakistan

FPCCI Advocates for Corruption-Free Taxation System in Pakistan

Karachi, February 28, 2024 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) is pressing for a corruption-free taxation system in Pakistan, aiming for fair treatment within the tax machinery.

Atif Ikram Sheikh, the President of FPCCI, proposed leveraging the office of the Federal Tax Ombudsman (FTO) to address maladministration at the Federal Board of Revenue (FBR) and establish a fair, corruption-free, and expanded taxation system.

President Atif Ikram Sheikh emphasized that key principles for reforming the FBR should include the broadening of the tax base, simplification of the taxation system, and the separation of tax collection and adjudication powers. He underlined the necessity of these reforms to meet the requirements of businesses and the overall economy.

Furthermore, Atif Ikram Sheikh urged the inclusion of advisors and technocrats from various sectors of the economy on the FTO board to ensure an inclusive and effective reform agenda. He acknowledged the commendable work of the FTO in providing thousands of fair, swift, objective, and cost-free resolutions to taxation and customs disputes.

Saquib Fayyaz Magoon, the Senior Vice President of FPCCI, stressed the importance of separating tax collection and adjudication to implement a proven and principled system, akin to the separation of judiciary and executive. He argued that unless the tax collector is distinct from the adjudicator, issues such as maladministration, harassment, corruption, and tax evasion will persist.

Magoon also highlighted the negligence in responding to FPCCI’s letters and correspondence by the FBR, urging the FTO to take notice of this malpractice. He expressed concern over the lack of responsiveness to the concerns, grievances, and feedback of the apex body of the business community.

Vice President Asif Sakhi lauded the FTO as a relief-providing organization, emphasizing its unbiased, merit-based, and free dispute redressals. However, he voiced concerns about the reluctance of the FBR in promptly implementing the decisions and resolutions of the FTO.

Aman Paracha, another Vice President of FPCCI, raised the issue of a significant anomaly in the import of bulk tea, calling attention to a violation of the Sales Tax Act 1990. He asserted that only small packaging with printed Maximum Retail Price (MRP) should be subject to MRP-based sales tax, while bulk industrial imports should be treated as raw materials.

Federal Tax Ombudsman Asif Mahmood Jah apprised the business community of the mandate and performance of the FTO. Dr. Jah revealed that 80-90% of complaints from the business community were ruled in their favor on average. He assured complainants of the option to appeal to the FTO or file a representation with the constitutional office of the President of Pakistan.

Dr. Asif Mahmood Jah clarified that while the FTO cannot directly reprimand tax and customs officials, it can make observations on misuse of powers, maladministration, anomalies, harassment, and corruption, which are taken seriously. He expressed his commitment to expedite the turnaround time for resolving complaints from 40 days to 40 hours, showcasing a dedication to swift and efficient dispute resolution.