Karachi, November 24, 2024 – The Income Tax Ordinance, 2001, grants tax officials of the Federal Board of Revenue (FBR) the authority to arrest individuals accused of concealing income. Section 203B of the updated ordinance outlines the specific powers and procedures tax officials must follow in such cases.
Under Sub-Section (1) of Section 203B, tax officials can arrest taxpayers if, based on material evidence from audits, it is determined that income concealment has resulted in tax evasion of Rs. 100 million or more for filers and Rs. 25 million or more for non-filers. Such arrests require written approval from a committee comprising the Minister for Finance and Revenue, the Chairman of the Board, and the senior-most member of the Board.
Sub-Section (2) emphasizes the role of the committee, ensuring that tax officials adhere to stringent oversight when exercising their arrest powers.
Arrests carried out under this ordinance must comply with the Code of Criminal Procedure, 1898, as stipulated in Sub-Section (3). This ensures that tax officials conduct arrests lawfully and in alignment with established legal standards.
In specific cases, Sub-Section (4) allows the Chief Commissioner, with prior Board approval, to compound offences if the taxpayer agrees to pay the due tax amount along with default surcharges and penalties. This provision offers taxpayers a chance to resolve disputes before or after legal proceedings, with tax officials playing a pivotal role in facilitating such resolutions.
For corporate offences, Sub-Section (5) empowers tax officials to hold company directors or officers personally accountable for acts contributing to income concealment or related offences. Arrests under this provision, however, do not exempt the company from its financial obligations, including taxes, surcharges, and penalties.
These measures reinforce the authority of tax officials in combating tax evasion and ensure strict compliance with the Income Tax Ordinance, highlighting the government’s commitment to addressing financial irregularities. Tax officials are central to the enforcement of these regulations, ensuring that taxpayers adhere to their legal obligations and contributing to a transparent tax system.
