FBR caps whistleblowing cash reward at Rs5 million

KARACHI: The Federal Board of Revenue (FBR) on Friday fixed a cash reward for whistleblowing that leads to recovery of evaded taxes at a maximum of Rs5 million.

The reward was capped under the new Inland Revenue Reward Rules 2021, which are applicable from January 1. Previously, a whistleblower was entitled to 20 percent of the recovered taxes against a tipoff.

By capping the reward money, the FBR wants to keep most of recovered taxes into the kitty, according to the sources. Under the rules, a private person can also be registered with the FBR to provide information of tax evasion.

“The whistleblower is required to provide information in the shape of concrete evidence, which conclusively leads to detection of tax evasion, formulation of assessment/reassessment and eventual recovery of the evaded taxes,” the FBR said in a statement.

The FBR also reduced the reward amount for tax officials. As per the new changes, officers and members of staff detecting tax evasion are entitled for lesser of 20 percent or two years’ salary as at the time of detection / filing of the detection report.

Further, officers and members of staff completing the adjudication / assessment are also entitled for lesser of 20 percent of the tax sought to be evaded or two years’ salary as at the time of completion of adjudication/assessment.

“If no appeal is filed against the assessment, the whole of the admissible reward shall be paid immediately after expiry of limitation for filing of appeal/revision,” said the FBR. “In case an appeal has been filed against the assessment order the admissible reward claims would be processed as 50 percent upon confirmation at first appeal forum and 50 percent upon completion of appellate process on point of fact i.e. Appellate Tribunal Inland Revenue.”

The FBR said the reward will be paid only if the tax sought to be evaded has been recovered at least to the extent of 50 percent of the tax sought to be evaded. The FBR further said if detection and assessment had been made by the same officer, “he shall be entitled to a reward of the lesser of 20 percent of the tax sought to be evaded or three years’ salary as at the time of detection/filing of the detection report.”

Under the rules, FBR may give rewards to officers/officials in recognition of the meritorious services at the close of every financial year. “The amount of reward for meritorious services in no case will be less than three and more than six salaries in each single case,” the FBR said.