Karachi, December 23, 2023 – The Pakistan Tax Bar Association (PTBA) has fervently recommended the adoption of consumer profiling before invoking Section 114B of the Income Tax Ordinance, 2001.
In a communication addressed to Amjad Zubair Tiwana, Chairman of the Federal Board of Revenue (FBR), the PTBA underscored the need for meticulous consideration before resorting to the enforcement tools outlined in the aforementioned section.
Section 114B of the Income Tax Ordinance empowers the FBR to issue a general order, specifying the names of individuals not on the active taxpayer’s list but obligated to file a return of income. The consequences listed under this provision include the disabling of mobile phones or SIM cards, disconnection of electricity, or disconnection of gas connections for the individuals named in the general order.
The PTBA, in its communication, brought attention to several critical issues that warrant thorough examination before any names are included in the general order. These issues are crucial for ensuring the meaningful and effective implementation of the law with objectivity and certainty.
Among the highlighted concerns are situations where compliant taxpayers may inadvertently suffer the consequences due to non-compliant tenants or landlords, and instances where individuals occupying properties may face repercussions if the previous owner is a non-filer. The association also drew attention to scenarios involving deceased or non-filing parents whose dependents may be filers, and individuals living in joint families who are not required to file returns.
Emphasizing the potential hardships that may arise from the lack of a fair chance for factual explanations, the PTBA warned against potential violations of the principles of natural justice, leading to potential litigation. The association recommended a fair and just examination of any explanations provided in response to notices under Section 114B before initiating any actions against non-filers.
While acknowledging that this approach may take time, the PTBA asserted that it would yield accurate data and genuine conversions of non-filers to filers, avoiding the pitfalls experienced in previous similar exercises.
The PTBA also highlighted the challenge faced by taxpayers in accessing information once identified by NADRA, with no access or knowledge of a portal for compliance and proceedings. The association urged a comprehensive review and resolution of this issue.
In a forward-thinking proposal, the PTBA recommended that gas supply companies, mobile service providers, and electricity distribution companies (DESCOs) across Pakistan establish an application similar to that operated by K Electric. This application would empower consumers to update their profiles, correct addresses, and provide sufficient time for compliance before any actions outlined in Section 114B are initiated.
The PTBA’s recommendations underscore the necessity for a nuanced and considerate approach in the implementation of Section 114B, ensuring fairness, justice, and the protection of taxpayer rights in the pursuit of fiscal responsibility.
