Relief for 12,000 taxpayers unable to upload declarations

ISLAMABAD: In a bid to provide relief to over 12,000 taxpayers who deposited Rs2.6 billion into the tax amnesty scheme but failed to file declarations, President Arif Alvi has rejected the FBR’s representation and upheld the judgment given by the Federal Tax Ombudsman (FTO) where he had directed the FBR to allow aggrieved persons to avail of this scheme.

The FTO had issued a judgment to give relief to 12,000 taxpayers who had deposited due tax under the Tax Amnesty Scheme (Assets Declaration Ordinance 2019) but were unable to upload their declarations on the last date due to the failure of the FBR's online system. Against this judgment, the FBR made representation to President of Pakistan Arif Alvi but he rejected the stance of the FBR and upheld the decision taken by the FTO.

The President’s Secretariat in its detailed representation stated that this representation was filed by the Federal Board of Revenue on 21-9-2020 against the orders of Federal Tax Ombudsman dated 20-8-2020 whereby it has been held that it should make arrangements and facilitate filing of declarations in respect of all aggrieved persons by invoking the provisions of Section 17 of the ordinance, update the IT system of department which requires a thorough review and efficient improvements and report compliance within 45 days.

The above mentioned 21 complaints were filed under Section 10(1) of the Federal Tax Ombudsman Ordinance 2000 (FTO Ordinance) for failure to avail the benefit of Tax Amnesty Scheme promulgated by the Government of Pakistan as Asset Declaration Ordinance 2019 due to non-responsiveness of the IT system of the FBR/department. All complaints being identical in nature were disposed of through a single consolidated order.

The complainants deposited under ordinance within the due date of Tax Amnesty Scheme but reportedly due to the system failure, the complainants failed to upload their declaration of assets on the system. Further, depositing tax within the due date was a bona fide act, which was manifested on the part of complainants who actually intended to avail the Tax Amnesty Scheme.

The Federal Tax Ombudsman called comments from the Secretary Revenue Division, Islamabad. The department submitted para wise comments taking a unanimous stance in all the above-referred complaints by providing minute-to-minute and hour-to-hour data of uploading of the declarations by the public on the last dates i.e. 30-6-2019, whereas 29,470 declarations were uploaded which spoke eloquently that the system was fully responsive and functional. Further, non submission of details of assets by the complainants was not understandable.

Admittedly, because of the last date, there was a massive pressure on the IT system, yet the system remained fully functional. Moreover, considering the magnitude of load on the system, PRAL arranged rented hardware to enhance its data handling capacity so that the public should not face any problem. Whereas the ordinance clearly stipulated that the filing of declarations of assets under Section 3 of the ordinance was a pre-requisite for availing the scheme and not the payment of taxes, as proviso to sub section (1) of section 6 of Ordinance allowed to pay taxes even up till 30-6-2020 along with incremental default surcharge. It was concluded that the disputed declarations had been rendered ineligible for availing the scheme.

On considering the stance of both sides, the learned Federal Tax Ombudsman passed the above referred order. The record reflects that up till 3-7-2019, a huge number of declarations paid tax aggregating to Rs2.6 billion. Almost a year has passed and the department has taken no measures to address the grievance.

Sadly, the department was also aware of the failure of the system in giving proper effect to tax amnesty scheme. Therefore, it was imperative for the department to remove the difficulty by invoking the provision of Section 17 of the ordinance. In the light of above stated discussions, inefficiency, negligence and incompetence on part of department officials was evident.

Thus, he concluded that the department had failed to ensure smooth functioning of its IT system to facilitate the prospective declarations to avail the Amnesty Scheme by uploading their declarations on the last date that amounts to incompetence and inefficiency on part of the FBR.