Litigation prevents FBR from collecting Rs88bn income tax

Updated 05 Mar 2020

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The amount has not been recovered because taxpayers have challenged the claims high courts and the Supreme Court. — AFP/File
The amount has not been recovered because taxpayers have challenged the claims high courts and the Supreme Court. — AFP/File

ISLAMABAD: Court cases related to income tax collection have stopped the Federal Board of Revenue (FBR) from recovering Rs87.42 billion from taxpayers.

According to an audit report presented before the Public Accounts Committee (PAC) at its meeting, the huge amount has been stuck because taxpayers have challenged the income tax claims in the customs, excise and sales tax tribunals, the high courts and the Supreme Court.

Acting chairperson of the FBR Nosheen Javed Amjad informed the PAC that the bureau could not recover the amount because 96 cases were pending against the claims. Some cases have been pending in the high courts since 2011 and 2012.

Ms Amjad said the FBR had taken up the matter with the chief justices of the Sindh High Court, Lahore High Court and Islamabad High Court and requested them to constitute special benches on tax matters for swift disposal of cases.

PAC chairman Rana Tanvir Hussain said that speedy recovery of taxes would reduce the huge shortfall of tax collection.

PAC grills aviation secretary over construction of parallel runways at Islamabad airport

The legal adviser of the FBR informed the PAC that 65 income tax-related cases were pending in the tribunals, 27 in the high court and four in the Supreme Court.

The audit report has also pointed out irregularities in the accounts of the FBR to the tune of Rs142.2 million for fiscal year 2012-13.

Earlier, the PAC grilled Aviation Secretary Hassan Nasir Jami since he could not satisfy the committee over construction of parallel runways at the Islamabad International Airport.

An audit report presented before the committee cited the International Standards and Recommended Practices — Aerodrome Design and Operations according to which “where parallel instrument runways are intended for simultaneous use, the minimum distance between their centrelines should be at least 1km”.

However, the audit report pointed out that the Civil Aviation Authority (CAA) had constructed a secondary runway parallel to the main runway with a distance of 210 metres between the centrelines of both runways.

The audit report said that “unjustified expenditure on secondary runway” had cost a Rs719 million loss to the national kitty.

Mr Jami told the committee that the parallel runway was not intended for simultaneous landings but it was designed as an alternative runway.

The auditors termed this reply as unsatisfactory saying that “there was vast difference between the specifications of runway and taxiway and there is no provision in bill of the quantity and recommendations of the CAA Operations Directorate for construction of a secondary runway in addition to a parallel taxiway.

The Federal Investigation Agency (FIA) told the committee that it had finalised an inquiry into this matter and referred it to the interior ministry for seeking approval for action against those officials who were responsible for committing negligence in this matter.

The committee however directed the secretary aviation to fix responsibility for such negligence and submit a report in this regard in a fortnight.

Published in Dawn, March 5th, 2020