President Asif Ali Zardari has upheld a pivotal order issued by Federal Tax Ombudsman (FTO) Dr. Asif Jah, targeting the Federal Board of Revenue (FBR) for engaging in illegal tax recovery methods.
The FBR, which utilized coercive measures such as attaching bank accounts, has come under scrutiny. This landmark ruling highlights the ongoing struggle to safeguard taxpayer rights across Pakistan.
The FTO’s decision, which reprimands FBR officers for harassing a taxpayer, underscores the need for reform within the revenue collection system. President Zardari’s endorsement of this ruling reinforces the importance of due process, stating that any warnings issued against officials should be preceded by a fair opportunity for them to be heard.
The controversy began when an aggrieved taxpayer filed a complaint with the FTO, accusing FBR officials of maladministration. The complaint, brought forward by Advocate Waheed Shahzad Butt, highlighted how FBR functionaries had illegally recovered funds from the taxpayer’s bank account without adhering to the due process of law.
The FTO, after conducting a thorough investigation led by Adviser Rana Hassan Akhtar, determined that the actions of the FBR officials constituted extreme maladministration. The Ombudsman concluded that the FBR’s recovery methods were not only unlawful but also represented an abuse of power intended to present fabricated performance results to the prime minister.
According to Waheed Shahzad Butt, the FBR’s conduct amounted to gross administrative excess and disregard for legal procedures. He emphasized that the forum of the FTO exists to protect innocent taxpayers from such unjust practices. Butt’s comments highlighted a broader issue within the FBR, where functionaries might resort to illegal tactics in an attempt to meet performance quotas.
President Asif Ali Zardari’s confirmation of the FTO’s order serves as a significant endorsement of taxpayer rights. His additional observation that warnings to officials should only be issued after providing them a proper opportunity to be heard stresses the importance of fairness and due process, even when addressing misconduct within the FBR.
The president’s stance reflects a balanced approach, ensuring that while taxpayer rights are protected, FBR officials also receive an equitable process when facing disciplinary actions. This decision marks an important step toward rectifying illegal practices within the revenue collection agency and setting a precedent for the future.
The FTO’s order explicitly states that initiating coercive proceedings without following the FBR’s own guidelines constitutes maladministration under Section 2(3)(i)(a) of the relevant legal provisions. The ruling directed the FBR to ensure that its functionaries comply with established instructions and to take remedial action where necessary.
The FTO further instructed the FBR’s Member IR-Operations to examine similar cases nationwide to determine if the instructions outlined in Circulars dated October 12, 2021, and October 5, 2022, are being followed. The FTO’s order includes the directive to issue warnings to tax officers who violated these instructions.
However, the commissioner expressed reservations about one aspect of the FTO’s order: the requirement to issue warnings to the involved tax officials. In response, President Zardari clarified that any such warnings should be preceded by an opportunity for a proper hearing, ensuring that the rights of the accused officials are also respected.
This case sheds light on the critical issue of fairness in tax collection and administration in Pakistan. The actions of FBR officials, as highlighted in this case, represent a broader problem of coercion and unlawful conduct in the pursuit of revenue targets. Such practices erode public trust in the tax system and can create undue hardship for law-abiding taxpayers.
By confirming the FTO’s order, President Zardari has sent a strong message that the rights of taxpayers must be upheld and that any actions taken by the tax authorities must be within the bounds of the law. The FTO’s ruling, backed by the president, emphasizes the need for transparency, accountability, and adherence to legal procedures within the FBR.
The Federal Tax Ombudsman plays a crucial role in addressing grievances related to tax administration in Pakistan. This institution serves as a check against the arbitrary and unlawful actions of tax authorities, offering taxpayers a means of redress when they are subjected to unfair treatment.
In this case, the FTO’s involvement proved essential in protecting the rights of the taxpayer and holding the FBR accountable for its actions. The Ombudsman’s decision to reprimand FBR officers for their misconduct sets an important precedent and demonstrates the power of this office to effect change within the tax system.
