The Federal Board of Revenue (FBR) has reinforced its authority to initiate and streamline recovery proceedings against tax defaulters with the introduction of Sections 146A, 146B, and 146C in the Income Tax Ordinance, 2001.
These sections, as amended by the Finance Act, 2021, provide the FBR with expanded powers and introduce an incentive scheme for the settlement of tax arrears.
Key Features of Sections 146A, 146B, and 146C:
**1. Initiation of Recovery Proceedings (Section 146A):
• Recovery proceedings for taxes under this Part can be initiated at any time.
• The Commissioner holds the authority to amend or recall certificates issued under Section 138A and issue fresh certificates as deemed appropriate.
• Taxpayers cannot challenge the validity or correctness of certificates issued under Section 138A or any amendments before the District Officer (Revenue).
• The modes of recovery provided in this Part are not mutually exclusive, and the Commissioner can choose any mode of recovery despite ongoing recovery processes.
2. Tax Arrears Settlement Incentives Scheme (Section 146B):
• The Board is empowered to formulate schemes for the recovery of tax arrears and withholding taxes, including the waiver of default surcharge or penalty.
• Rules for the implementation of such schemes can be made under Section 237.
3. Assistance in Recovery and Collection of Taxes (Section 146C):
• The specified sections, including 146A and 146B, apply mutatis mutandis to provide assistance in the collection and recovery of taxes in response to requests from foreign jurisdictions under tax treaties, multilateral conventions, intergovernmental agreements, or similar arrangements.
Significance and Implications:
These amendments empower the FBR to take prompt and decisive actions for the recovery of taxes, ensuring a more robust and flexible approach. The introduction of an incentive scheme for tax arrears settlement provides an avenue for defaulters to resolve their outstanding liabilities, potentially contributing to increased revenue compliance.
Disclaimer: The information provided above is based on the text of Sections 146A, 146B, and 146C of the Income Tax Ordinance, 2001, as amended by the Finance Act, 2021. Readers are advised to refer to the official documents for accurate information.
