Federal Tax Ombudsman (FTO) has initiated an investigation into Federal Board of Revenue (FBR) for imposing heavy costs on taxpayers to comply with SRO 428, which requires online integration of businesses and retail outlets with the FBR’s e-computerized system.
FTO will also investigate allegations of privacy violations related to taxpayer data. In response to a complaint filed by a Lahore-based taxpayer, FTO has issued notices to the Secretary Revenue Division and Chief CIR, demanding a response to the allegations by October 16, 2024.
The SRO 428(I)/2024 mandates compulsory integration for 14 specific categories of business enterprises. Taxpayers within these categories are required to pay significant costs to comply with the new requirements.
A tax lawyer argued that FBR’s decision to allow a private company to handle and utilize taxpayer data under the guise of online integration violates section 216 of the Income Tax Ordinance 2001. He cited previous Supreme Court rulings that ordered disciplinary and criminal proceedings against tax officials who contravened this privacy provision.
The tax lawyer criticized FBR’s Legal, Operations, and IT Wings for their failure to address the concerns of taxpayers effectively. Despite FBR’s responsibility to ensure fair and equitable taxation, the lawyer claimed that the FBR has burdened taxpayers with excessive costs through the forced implementation of SRO 428.
The complaint against the Secretary Revenue Division, IR-Operations, Legal, and Information Technology Members, CCIR, and a private limited company alleges maladministration of justice, violation of section 216 of the ITO, and excessive costs imposed on taxpayers. The complainant requested FTO to issue recommendations to FBR to provide complete documentation, SOPs, and a flowchart of the fiscal and tax information provided to the private company.
Additionally, the complainant demanded that FBR justify the exorbitant charges, explain similar practices in other countries, and provide evidence that there is no favoritism or nepotism involved in the selection of the private company.
Finally, the complainant requested FTO to initiate criminal proceedings against tax employees responsible for the biased and forced implementation of SRO 428 through a private limited company at exorbitant costs.
