The Federal Board of Revenue (FBR) has failed to send cases to the Karachi-based Corporate Tax Office (CTO), and the CTO site now contains 65,170 unassigned cases. This is expected to cost the government billions of rupees in income.
This was revealed in an Own Motion (OM) investigation launched under Section 9(1) of the Federal Tax Ombudsman O rdinance, 2000 (FTO Ordinance) into the FBR functionaries’ neglect, inattention, incompetency, inefficiency, and ineptitude in discharging their duties, which included the non-assignment of proper jurisdiction in many cases.
In accordance with the FTO Ordinance and Section 9(1) of the Federal Ombudsmen Institutional Reforms (OIR) Act, 2013, the complaint was sent to the Secretary Revenue Division for comment.
In response to the hearing notice, OIR, the SO Technical of the CTO Karachi, as well as the relevant IRIS record, attended the proceedings.
There was once just one RTO in Karachi, which has since been divided into three RTOs. The necessary identifying records of the two RTOs were moved to respective portals, however, all inactive cases and taxpayer records with missing information remained on the CTO Karachi web. Furthermore, the Pakistan Revenue Automation Company (PRAL) automatically puts all newly filed cases into the CTO, which are continually sent to the respective jurisdictions upon the verification/request of taxpayers.
According to the FTO’s study, a considerable majority of these cases are deceased, while 18,591 are active taxpayers.
According to the submission, the right jurisdiction of 18,591 cases has been determined, with 6,828 and 15,615 active taxpayers belonging to RTO-I and RTO-11, Karachi, respectively. As a result, a letter dated 16 April 2022 and a CD containing a list of these cases to be transferred to the right jurisdiction was delivered to the Secretary (IR jurisdiction) FBR Islamabad.
An extremely high number of cases were laying without legal jurisdiction, causing taxpayers not just annoyance but also suffering owing to the department’s enforcement delay. Maladministration is defined by Section 2(3)(i)(a)(b) &(ii) of the FTO Ordinance as indifference, inattention, and incompetence in the performance of tasks.
The FTO advised the FBR to simplify the IT process to enable the prompt assignment of newly filed cases to their respective jurisdiction, as well as to establish and implement an effective method for resolving jurisdictional conflicts among different field units.