Inland Revenue officers empowered to recover non-tax revenue

ISLAMABAD: The officers of Inland Revenue have been empowered to recover non-tax revenue by invoking provisions of Income Tax Ordinance, 2001.

The finance ministry has issued Public Finance Management Act, 2019, which was amended up to June 30, 2020 through Finance Act, 2020.

According to Section 40E of the Act, a commissioner of Inland Revenue has been empowered to make recovery of non-tax revenue.

“40E. Recovery of non-tax revenue by Commissioner (Inland Revenue).-

(1) If the amounts as per sections 40B and 40D are not paid within ninety days of having been due, the Finance Division, in consultation with the concerned Division may refer any defaulter’s case to the Commissioner (Inland Revenue) concerned for recovery as it were an arrear of income tax.

(2) The Commissioner (Inland Revenue) shall recover the arrear in accordance with the provisions of the Income Tax Ordinance, 2001(XLIX of 2001) and deposit the receipt in the Federal Consolidated Fund as per section 40C.”

Section 40B. Levy and collection.

(1) Non tax revenue shall be levied and charged in accordance with the provisions of relevant laws and such other applicable instruments.

(2) Notwithstanding anything to the contrary contained in any other law for the time being in force, public entities as defined under section 36 shall pay non tax revenue representing-

(a) mark up on loans lent by the Government, as per the amortization schedule attached with the financing agreement;

(b) dividend against the Government’s equity investments as declared by the respective board of directors out of accrued profits of the entity:

Provided that if public entity is wholly or substantially owned by the Government, proposals with regard to declaration of dividend and allocation for reserve fund, capital requirements etc shall be examined by the controlling Division in consultation with the Finance Division before deliberations and decision in the board of directors.

(c) surplus profits as per the provisions of relevant laws; and

(d) any other amount owed to the Government as accrued:

Provided that the public entities shall pay accrued amounts of non-tax revenue as per clauses (a) to (d) being the first charge on their gross revenues or profits, as the case may be.

(3) Non tax revenue representing foreign grants and payments, receipts from provision of services, rents, recovery of over-payments, sale of property etc shall accrue on completion of the prescribed process.

(4) The revenue collection offices shall be responsible for collection of all the accrued amounts of non tax revenue from liable public entities, individuals, firms, companies etc as per the time specified in the relevant laws and rules. Finance Division shall prescribe procedures for monitoring and reporting of non tax revenue by the revenue collection offices.

Section 40D. Late payment surcharge.-

(1) Notwithstanding anything to the contrary contained in any other law for the time being in force, an amount equal to monthly weighted financing cost of Government’s domestic borrowings shall be payable during the period of default, in addition to the amount due under section 40B, if not paid within the stipulated time.

(2) Finance Division may prescribe procedure for levy and collection of the surcharge under sub-section (1).

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