Committee set up to decide about tax defaulters’ arrest

ISLAMABAD: With the passage of the revised sections 203-A and B of the Finance Bill 2021-22, the government has established a high-powered committee to decide about arrest of willful tax defaulters on concealment of Rs100 million income in case of a filer and Rs25 million in case of a non-filer.

The revised approved Finance Bill 2021-22 reads out that a committee comprising Finance Minister, Chairman of Federal Board of Revenue (FBR) and FBR’s senior most member would decide about arresting willful tax defaulters involved in concealment of income.

Where the offence of concealment of income which has resulted in non-payment of tax of Rs100 million and above in case of a filer and Rs25 million or above in case of a non-filer, the procedure provided in section 203B shall be applicable.

Where on the basis of material evidence brought on record as a result of audit conducted by the auditors in terms of sub-section (8) of section 177 read with section 214C of the Income Tax Ordinance, an assessment is made or amended under section 121 or 122 of this Ordinance, as the case may be, and the assessing officer records a finding that the taxpayer has committed the offence of concealment of income which has resulted in non-payment of tax of Rs 100 million and above in case of filer and Rs 25 million or above in case of non-filer, the taxpayer may be arrested after obtaining written approval of the committee.

All arrests made under this ordinance shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure 1898, it stated. Where any person has committed offence of concealment of income or any other offence warranting prosecution under this Ordinance, the Chief Commissioner with the prior approval of the Board may, either before or after the institution of any proceedings for recovery of tax, compound the offence if such person pays the amount of tax due along with such default surcharge and penalty as it determined under the provisions of this Ordinance.

Where the person suspected of offence of concealment of income or any offence warranting prosecution under this Ordinance is a company, every director or officer of that company whom the authorised officer has reason to believe is personally responsible for the actions of the company contributing to offence of concealment of income or any offence warranting prosecution under this Ordinance shall be liable to arrest.

Provided that any arrest under this subsection shall not absolve the company from the liabilities of payment of tax, default surcharge and penalty imposed under this Ordinance, the amended bill added.

Through amendments to the Finance Bill 2021, the increase in tax on milk and dairy products from 10 to 17 percent was withdrawn, 17 percent tax on gold silver was being reduced to one percent and three percent respectively whereas on its value addition the tax would remain 17 percent. The reduced rate of sales tax on poultry and cattle feed has now been restored to 10 percent and no tax on flour and flour products.