FTO directs revamping tax deregistration of deceased individuals

FTO directs revamping tax deregistration of deceased individuals

The Federal Tax Ombudsman (FTO) has taken notice of repeated notices being issued to deceased individuals with zero assets and has instructed the Federal Board of Revenue (FBR) to revamp the deregistration system to prevent this from happening.

The FTO has directed the FBR to create a new process for deregistering deceased individuals and develop a standard operating procedure (SOP) to address any system-based issues that prevent the deletion of NTN/Registration despite legal orders having been made in IRIS by the relevant IR authority.

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During a hearing, it was brought to the FTO’s attention that the FBR’s IT system may not be fully integrated, as there appear to be significant gaps in the system that prevent the deletion of NTN/Registration despite legal orders having been made in IRIS by the relevant Commissioner IR. This prompted the FTO to request that the FBR urgently review the entire deregistration system.

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The department has resolved the complainant’s issue of de-registering and granted the necessary relief through the active intervention of the FTO. IT (Wing) provided specific comments confirming that after the de-registration order under section 82(5) of the Ordinance was passed, the tax officer’s access to the system was limited, and the necessary changes were made to the system to address the complainant’s issue. The department also provided a flowchart of the de-registration process and a written response as proof of the complainant’s de-registration in the system.

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The FTO order concluded that since the complainant’s issue was resolved as a result of the FTO Secretariat’s intervention, the case is now closed. However, the FTO has highlighted the need for the FBR to improve its deregistration process to prevent similar issues from arising in the future. This is crucial in ensuring that the tax system operates smoothly and efficiently, without causing undue inconvenience to taxpayers.

The FBR must take steps to address any system-based issues that hinder the deregistration process and ensure that the SOP developed by the FBR is comprehensive and effective. Moreover, the FBR must also ensure that its IT system is fully integrated and capable of handling the needs of the tax system, including the deregistration of deceased individuals. Failure to address these issues may lead to continued inconvenience for taxpayers and erode confidence in the tax system.

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Overall, the FTO’s directive is a positive step in the right direction towards improving the tax system and ensuring that taxpayers are not unnecessarily burdened. The FBR must now act swiftly and decisively to implement the necessary changes to improve the deregistration process and prevent similar issues from arising in the future.