ISLAMABAD, July 11: As many as Rs25 billion tax arrears were stuck up in appeals in appellate courts due to the complicated and time consuming procedures of tax laws.

The complicated laws and procedures encouraged the tax administration to involve the genuine taxpayers in unnecessary litigation, said an official report of Central Board of Revenue (CBR).

And the shrewd taxpayers thrive on tax avoidance by taking advantage of the lacunas in the tax laws and the procedures.

According to the report, a copy of which was made available to Dawn, the amount stuck up at various stages were involved in respect of several assessment years, which exceeded Rs25 billion.

The actual amount in arrears might be much more because of the fact that there were many cases, which were still pending with the authorities concerned.

The report says that the system, besides being ineffective has many in-built disadvantages due to which the disposal of backlog takes about 2-3 years.

In income tax appellate tribunal (ITAT), 25,000 appeals were filed each year, out of which only a few thousands were decided annually.

Moreover, the time taken for decisions run into a number of years, which adequately explained the enormity of the problem, wastage of valuable time of the stakeholders and also the money.

The system of appeals involved high cost of time and money both by the tax administration and the taxpayers.

Similarly, the taxpayers were required to maintain lengthy records for a considerably long period and to be represented by the tax consultants or advocates involving higher fees.

According to the report, most of the assessing officers were neither conversant with the laws nor were trained for performing the functions of quasi judicial or before the judicial forums.

“There are glaring mistakes of legal and procedural nature in assessment order. Many assessing officers heavily rely on their subordinate staff in drafting the orders which are mostly non- speaking and stereotype. The obvious result is either remand or quashment of a fairly large number of orders by the appellate authorities”, the report added.

The report says that all the tax laws are in English language, which might not commonly be understood by most of the taxpayers. Thus the taxpayers remained on mercy of tax collectors and tax consultants, who generally exploit their weakness by prolonging the litigation, the report added.