ISLAMABAD: The Federal Tax Ombudsman (FTO) decided 71.6 per cent of the total complaints in favour of taxpayers in 2014, the FTO office observed in its annual report for the year.

In all, the FTO decided 1,108 cases in favour of taxpayers out of total 1,548 complaints received during the year.

According to the report, as many as 305 (19.7pc) complaints were rejected as compared to 235 complaints in the previous year. Moreover, the applicants withdrew 135 (8.72pc) complaints during the year 2014 as against 183 (9.86pc) complaints in 2013.

The FTO secretariat received total 1,624 fresh complaints from taxpayers during 2014 as against 1,898 in the previous year, reflecting a decline of 14.4pc.

The break-up of the complaints showed income tax topped the list with 835 (51.4pc) complaints, followed by 536 (33pc) sales tax, 219 (13.5pc) customs, and 34 (2.1pc) federal excise duty.

According to the report, non-responding to taxpayers’ correspondence and delay in dispute settlement are the abiding systemic issues of tax maladministration. Besides, inefficiency, arbitrariness, harassment, illegality, and reprisals are the most common complaints. Acting on complaints of wrongful taxation, the FTO got refunded a sum of Rs5.389 billion from taxation departments to the taxpayers as compared to Rs8.230bn during 2013.

The claims of duty drawback and tax refund, out of a total 82,000 claims involving an amount of Rs3.842bn were got settled through own motion intervention by the FTO as compared to 178,309 claims involving an amount of Rs7.260bn got settled in 2013.

According to the report, 43 cases, in addition to 148 formally investigated cases, were informally settled in 2014 without docketing complaints for formal investigation, as compared to 86 cases settled in 2013.

The ratio of the acceptance or implementation of the FTO’s decision is quite satisfactory. As many 1,309 (84.56pc) decisions of the FTO were accepted by the taxpayers and FBR in 2014 as compared 1,563 (84.21pc) in 2013.

Contrary to this, 239 (15.44pc) of the FTO’s decisions were challenged during 2014 through review or representation mechanism as compared to 293 (15.79pc) decisions challenged during 2013.

According to the report, 993 cases of FTO recommendations, issued during 2008-2014, were pending implementation by the FBR and its field offices at the end of 2014.

These cases did not include cases where representation or review petition has been filed by the FBR or the taxpayers.

As delay detracts much from the FBR’s organisational credibility for redress of taxpayers’ grievances against tax maladministration, it needs to put in place a reliable system to ensure prompt implementation of FTO findings/recommendations for expeditious redress of taxpayers grievances in the light of directives of the president and prime minister of Pakistan.

Published in Dawn, July 5th, 2015

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