ISLAMABAD: The advisory committee of the Federal Tax Ombudsman (FTO) has expressed distress over attachment of bank accounts and coercive recovery by Federal Board of Revenue (FBR) from bank accounts of taxpayers.
A meeting of the advisory committee of the FTO was held recently and discussed various issues related to refunds and coercive recovery of the FBR from bank accounts of taxpayers, according to the FTO new letter issued last month.
The committee expressed great distress about the attachment of bank accounts and coercive recoveries. The participants suggested that attachment of accounts may be affected only after Tribunal’s decision.
On the issue of refunds, the participants observed following:
Delayed refund is a serious issue which continuously poses challenge to the survival of business community.
Refund amount should be paid after two stages of appeals in favor of taxpayer, even if department then goes to reference before the higher court.
An online system for tracking of refund by claimants should be put in place by FBR.
A system of adjustment of refund in the next return should be devised to get rid of the chronic issue of delayed refund.
Even after verification of claim, cheques are not issued in time.
The refund payment system ought to be dovetailed with magnitude of amount as 70-75 percent of refunds fall in the category of up to Rs100,000 only and need automated settlement.
Compensation for delayed refunds should be ensured as delayed has its own cost.
Regarding assessment by the tax officials, the FTO advisory committee observed following:
Arbitrary, coercive and malafide assessment is the root cause of all subsequent tax maladministration and victimization of business community.
There is no accountability on arbitrary, coercive and malafide assessment.
There should be some check on the quality of assessment made by an assessing officer.
At times undated orders are issued.