ISLAMABAD: The verbal orders from the competent authority barring Federal Board of Revenue (FBR) from carrying out raids on the illegal businesses have affected the revenue collection-related operations in considerable terms.
The department of Intelligence and Investigation of the Inland Revenue (I&I-IR) has been verbally ordered from the competent authority to abstain from conducting operations because of the fact that the interim government does not want to face any law and order related issue from the business community in result of raids.
In 2016, the Lahore High Court (LHC) stopped the Federal Board of Revenue (FBR) from raiding/visiting business places of taxpayers without solid evidence while hearing a petition against the operations of the FBR.
Similarly, in April 2017, Senate Committee on Finance and Revenue Chairman Saleem Mandviwalla showed serious concerns over the Federal Board of Revenue (FBR) raids on business premises and said he would take up the issue in finance committee meeting.
However, through the Finance Act 2018, FBR was allowed to carry out operations, a source at FBR told Customs Today on Thursday. Soon after the passage of Finance Act 2018, the interim government took charge of the financial affairs of the country, source added.
The interim government is mandated only to hold general elections and run the affairs of the country on ad-hoc basis; therefore, it verbally asked FBR to direct I&I-IR to avoid any kind of raids like activities.
Therefore, the source said that no significant raid had been carried out except minor interception in the movement of illegal cigarettes manufactured at factories situated in Mardan or other areas. The source further said that FBR had taken up the issue with the finance minister on a number of times but could not get the verbal orders reverted. Therefore, this situation is impacting the revenue collection considerably.
The source said that in order to take the spirit of tax reform forward and with a view to assist the field formations to increase the taxable, the existing Director General of Broadening of tax Base FBR was renamed as Director General, Directorate of Intelligence & Investigation, Inland Revenue in March, 2011 and designated as Income Tax, Sales Tax and Federal Excise authority through finance acts 2011-12.