KARACHI: Business community has recommended to establish an independent tax appellate system in the country to boost taxpayers’ confidence and discourage irrational assessments.
Overseas Investors Chamber of Commerce and Industry (OICCI) in its budget proposals for fiscal year 2020/2021 recommended to establish the independent tax appellate system to boost taxpayer’s confidence and discourage irrational assessments by the tax authority driven by revenue collection targets.
Due to immense delays in conclusion of disputes by the appellate authorities and fear of financial exposure arising from recovery proceedings by FBR, taxpayers have to resort to the High court to cover their financial exposure.
The first appellate authority Commissioner Appeals come under the direct administrative control of FBR whereas the second appellate authority Appellate Tribunal Inland Revenue comes under the administrative control of the Ministry of Law.
There is a need of major reforms in the tax appellate process to expedite resolution and ensure fairness in the process.
The OICCI recommended:
i. Tax appellate forums should come under the direct supervision of High courts and should be independent of FBR.
ii. Professional Tax adjudicators should be appointed in the process with clear tasks of rapid disposal of cases.
iii. Recovery proceedings should not be initiated until tax assessments have passed at least one independent forum.
iv. Decision should be made within 60 days of the filing of the response.