ISLAMABAD: A local government department in Larkana hit back at the Federal Board of Revenue’s tax demand of Rs20 million by bringing a tractor trolley full of garbage and dumping the waste at the main entrance of local office of the income tax department.

Official documents available with Dawn show that the income tax department had passed an assessment order on Dec 11, 2014, and demanded of the Larkana TMA to pay Rs19.9 million in taxes and duty.

Know more: NAB asks FBR to curb tax evasion

Instead of making the payment to the tax department, the Taluka Municipal Administration (TMA) of Larkana dumped garbage at the entrance of the income tax department, the field formation of FBR, after the latter refused to withdraw the tax demand.

The documents show that the Larkana TMA has made payment of more than Rs500 million under different heads, without deducting tax at source and no record for the payment was provided to the tax officials.

Under the recovery drive ordered by the Federal Board of Revenue, the tax department collected Rs13 million from the TMA, while Rs6.5 million had to be recovered after freezing bank accounts of the TMA department.

“This is just a tip of the iceberg, as it has become a normal practice in Sindh that TMAs make payments without deducting tax,” an official of the Inland Revenue intelligence wing told Dawn on Thursday.

The department, according to the official, was investigating records of other TMAs working across Sindh.

In order to recover the amount, the Withholding Tax Unit-I, Larkana, initiated proceedings, but the TMA failed to pay the full amount by due date which led to freezing of its bank accounts under Section 140 of the Income Tax Ordinance.

On freezing of bank accounts, the Deputy Commissioner of Larkana intervened and asked the Deputy Commissioner of Inland Revenue to unfreeze the bank accounts of the TMA, but he refused and said that it would be an illegal act to unfreeze bank accounts without payment of dues.

Sources said that the deputy commissioner became hostile over this reply of the income tax official and asked him to get ready to face the music because the municipal staff would go in revolt against the tax department.

According to a statement of the income tax officer, the Larkana Deputy Commiss­ioner threatened him that he would not allow the normal functioning of the income tax office in Larkana in reaction to its demand for recovery of dues from the TMA office.

The Deputy Commissioner of Inland Revenue further said in the statement that he feared that since the Larkana Deputy Commissioner had become hostile, he might instigate his staff to block normal functioning of the tax department and might try to inflict physical harm to himself and other officers and workers of the income tax department.

“This situation is creating problems for smooth collection of federal tax department,” the officer said, adding that government should provide protection to tax officials in performing their duty.

Published in Dawn, April 3rd, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play