FTO recommends restricting tax officials’ powers in recovery through bank attachment

FTO recommends restricting tax officials’ powers in recovery through bank attachment

ISLAMABAD: Federal Tax Ombudsman (FTO) has recommended restricting powers of tax officials in recovery of outstanding account through freezing bank account of taxpayers.

The FTO in its proposals for budget 2021/2022 said that coercive recoveries through attachment of bank accounts without notice and subsequent delay in restoring the account, hits the taxpayers very hard.

It was recommended that notices should be issued with bar code and time limit may be prescribed for ensuring the de-sealing of bank accounts of taxpayers/assesses after resolution of issue.

Following measures were also suggested as budget proposals:

• Restrict the use of power to attach bank accounts unless the case under litigation has been established at least in the first appellate stage;

• Adherence to service of Bar-Coded notices to eliminate possibility of abrupt attachment of bank accounts for recoveries and hasty ex-parte decisions;

• Shortest time limit may be prescribed in the statute to ensure de-sealing of bank accounts of taxpayers/assesses.

According to FBR, it is mandatory not to issue Income

Tax related notice without Bar Code. The mechanism of automatic stay of demand by paying 10 percent of demand also exists under all IR laws.

However, FTO constantly receives complaints on coercive recoveries and issues appropriate Recommendations.

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