Rs1,856b stuck up in pending court cases, FBR tells PAC

ISLAMABAD: Chairman Federal Bureau of Revenue Javed Ghani told the Public Accounts Committee on Tuesday that the Reforms Wing has been established in the FBR and the system will be introduced through digitalization and automation under which no one would be able to hide his or her wealth. The chairman FBR further told the PAC that the manual system to meet the tax collection targets and for elimination of corruption will be abolished.

The meeting of the Public Accounts Committee was held under Chairman Rana Tanveer Hussain here on Tuesday in which the audit Paras related to the FBR were examined and the chairman FBR gave a briefing on the reforms in the board.

During the meeting, the PAC also assured the FBR its support for the conclusion of pending cases of FBR in courts of law in which an amount of Rs1,856 billion were stuck up. It was revealed before the PAC that despite paying refunds of Rs182 billion, refunds of Rs 740 billion were still pending.

The PAC was told that the tax exemptions of over Rs1,140 billion were the main hurdle in meeting the tax collection targets and tax refunds. The officials of the FBR told the committee that billions of rupees of tax refunds were still pending under the faster system and manual system. The officials told the committee that Rs57 billion had been released in the head of the Income Tax refunds and Rs18 billion in the head of GST refund.

PAC member Khawaja Muhammad Asif said that cases over Rs1,856 billion were pending in the courts of law and the FBR got only Rs 60 million to plead the cases in the court that was insufficient as reputed lawyers took fees in millions. “We should not only request the Supreme Court for early hearing of the pending cases and also take this matter into the parliament as with Rs60 million, an amount of Rs1,856 billion could not be recovered,” he said. He said the parliament, attorney general and federal government should also make a request to superior courts to dispose of the tax related cases within six months’ time.

Chairman PAC Rana Tanveer Hussain remarked that the committee will support the FBR in this regard and will also request the Supreme Court of Pakistan but the FBR should also activate its tribunals. The PAC directed the FBR to make out all efforts to Pay Income Tax refunds of Rs 45 billion.

PAC Member Sardar Ayaz Sadiq said the directions should be given to Income Tax commissioners to play an active role for the recovery.

Khawaja Muhammad Asif said the names of big tax defaulters should be made public.

Chairman PAC Rana Tanveer Hussain questioned that why the FBR took the help from the government for payment of refunds from the budgetary measures. The FBR officials told the committee that refunds of Rs250 billion were still pending in the Sales Tax refund for the last 12 years while the FBR has to make payments of refunds of Rs390 billion in the head of Income Tax refund.

The official told the PAC that the FBR did not have the financial capacity to pay refunds of billions of rupees every year and even the refunds of Rs100 billion before the financial year of 2014 were still pending as these claims were filed manually. The officials of the FBR told the committee that the financial position of the FBR is weak and that was reason that it was issuing refunds of the current financial year.

The committee was told that though the there was zero tolerance for corruption but corruption at lower level could still not be stopped. Sardar Ayaz Sadiq said the law ministry did not make appointments in tax tribunals for the last many years.

PAC Member Hina Rabbani Khar expressed her dissatisfaction over the briefing of the FRR.

While replying to the PAC members, Chairman FBR Javed Ghani said the FBR focused on increasing the revenue as per the direction of the government and moving towards the documented economy. He told the committee that the FBR has manpower of 7,000 employees for tax collection and there is a need to make investment in this sector.