Karachi, September 9, 2023 – Pakistan has granted authorization for tax authorities to enter and search premises for the purpose of conducting audits and assessing individuals liable for taxation.
Sources in the Federal Board of Revenue (FBR) – the apex tax collecting agency in Pakistan – on Saturday said this authority has been established under Section 175 of the Income Tax Ordinance, 2001.
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According to Section 175:
Access to Premises: Tax officials, including the Commissioner and officers authorized in writing by the Commissioner for this purpose, are granted the following rights:
They have full and free access, including real-time electronic access, to any premises, place, accounts, documents, or computers at all times and without prior notice.
They may stamp, extract, or copy any accounts, documents, or computer-stored information to which access is granted.
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They may impound any accounts or documents and retain them for examination or for the purposes of prosecution as necessary.
In cases where a hard copy or computer disk of information stored on a computer is not made available, they may impound and retain the computer to copy the required information.
They may make an inventory of any articles found in the premises or place to which access is granted.
Authorization of Valuers or Experts: The Commissioner may authorize valuers or experts to enter premises and perform tasks assigned by the Commissioner.
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Cooperation of Occupiers: The occupier of any premises or place to which access is sought must provide all reasonable facilities and assistance for the effective exercise of the right of access.
Examination by Owners: The owner of impounded accounts, documents, or computers may examine them and make extracts or copies during regular office hours under the supervision of the Commissioner.
Compensation for Loss or Destruction: If any impounded accounts, documents, or computers are lost or destroyed while in the possession of the Commissioner, reasonable compensation will be provided to the owner.
Override of Privilege: This section’s provisions take precedence over any rule of law related to privilege or the public interest concerning access to premises or places, or the production of accounts, documents, or computer-stored information.
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Definition of Occupier: In this context, “occupier” in relation to any premises or place refers to the owner, manager, or any other responsible person at the location.
Electronic Access Rules: The Board may establish rules related to electronic real-time access for audit or surveys of individuals liable for taxation.
This authorization empowers tax authorities to conduct thorough assessments and audits by gaining access to relevant premises, accounts, and documents, including real-time electronic access, as needed for taxation purposes. It is important for taxpayers to be aware of and cooperate with these legal provisions to facilitate tax assessments and ensure compliance with tax regulations.
