ISLAMABAD: In a proactive move, the Federal Board of Revenue (FBR) has directed field formations to ensure that registered taxpayers are given ample time before initiating any recovery efforts.

This step, which aims to reduce potential litigation cases, underscores the FBR’s commitment to a fair and balanced tax system.

The direction came from the FBR in response to letters sent from the office of the Attorney General for Pakistan (AGP), which identified deficiencies in the tax department’s legal department.

The letters pointed out that stay petitions are filed primarily because taxpayers’ appeals are not heard or entertained before the Commissioner (App­eals), and the department withdraws funds from taxpayers’ accounts shortly after passing an order-in-order (OIO) without serving such an order on the taxpayer.

The income tax law has a provision that allows taxpayers time to pay their taxes before recovery processes begin. However, neither the Sales Tax Act of 1990 nor the Federal Excise Act of 2005 includes such a provision.

The FBR has mandated all chief commissioners of Inland Revenue to issue a recovery intimation notice under sales tax and FED, which must be issued at least seven days before any recovery action.

Published in Dawn, May 19th, 2024

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