The Federal Tax Ombudsman enjoys no utility for overseeing the administration of indirect taxes. These taxes have no direct concern with the people who bear their real burden.

They are confined in their charge and operation to the privileged class of businessmen who import/export, manufacture/produce and distribute goods and services and are strong enough to take cudgels with the legislature which enact these laws; the government and the CBR which administer them; and their employees who directly come in contact with them.

This segment of the economy is too powerful to need further free help and assistance of the FTO and thus unnecessarily add to the cost of collection of taxes.

The FTO office could be of some utility to those who are charged tax on their hard-earned income year after year. It gains justification to exist if it grants relief and redress for which remedies are not available within the hierarchy of the IT Ordinance.

From its very inception the office of the Ombudsman serves the rulers to ensure the rule of law and even-handed justice between man and man, and protects citizens from the clutches of elites of the society, exploiting them by corrupting public servants.

The President was well advised to determine the status and functions of this office as a 'Complaint Cell in the President House' to remain in direct touch with the CBR.

Basically, the intention of the President appears to alarm the CBR employees that they were being physically overseen by an independent external agency. He did not like to duplicate the administration of the federal taxes by empowering the overseer to start administering the tax laws himself.

A balance was attempted in keeping the administration intact, on the basis, extent, mode and manner, provided in the tax statutes and yet keep the tax-employees frightened of mal-administration.

The jurisdiction of the FTO is curtailed so as to leave practically nothing administratively and judicially material for him to do. In short the President was pleased to create a Staff Officer for himself with lots of ceremonial trappings and trimmings provided to his office.

Perchance the first FTO employed under section 3 happened to be a retired judge of the Supreme Court of Pakistan, who authored some leading judgments on federal taxes brought before him for interpretation.

Confronted with the limitations of his jurisdiction, he made efforts to make his jurisdiction more material and fruitful. Besides, he tried to make the use of pressure groups, like businessmen's chambers and other stakeholders, to help him in rooting out mal-administration from the federal taxes.

Had the FTO thoroughly studied and analyzed the structure of corruption and inter se distribution of loss of revenue caused to the exchequer,given in the table below,he must have realized that his real scope and field of functions lay elsewhere as specifically described in Section 9(4) of the Ordinance.

The Ombudsman has now requested to enable him to intervene into the administration of federal taxes. He has realized that his judicial exercise in doing so within the existing statutory provisions of Section 9(2)(b) of the Ordinance, it was not possible for him to do what he had taken upon. In this drive, the entire business community is supporting him.

This law finds traces in English history, structured to suit in an alien society. The responsibility was on an IT officer with vast and coercive powers to impose and collect direct taxes.

Two supervisory officers, the AAC on judicial and an IAC on the administrative sides were placed over him to control his judgments and orders. This triangular structure has since sustained.

On careful analysis, it would be seen that the office of the FTO introduced in 2000, tends to redouble the functions of an IAC. His responsibility was to polish, refine and reform the assessment work of the IT officers and to have a physical check over them.

While he was charged to prevent under assessment, he was equally responsible for discouraging and checking over-assessment of income. This he would do through 'Approval' of draft assessment orders made by the ITO in revenue-potential large-cases, and random checking of assessment and collection of tax in ordinary cases.

The assessment and collection of tax could not keep pace with the economic growth. Corruption, being beneficial to both the assessor and assessee alike, became rampant in this service too.

It became more congenial as the IT proceedings were declared confidential to all outsiders, and the exercise of 'assessment' and 'collection' was carried out behind closed doors, providing complete security to erosion of moral character.

To retrieve the loss, legislature vested further judicial powers to an IAC to reopen the orders already made by the ITOs. In larger cases corruption started travelling from an ITO to an IAC.

Let us now study the justification, propriety and efficacy of the FTO as provided in Ordinance, 2000. It is nowhere visible from any word used in the entire Ordinance that the office of the FTO was created to function as a parallel agency duplicating the assessment and collection work or embark upon "adjudication" of genuine and valid controversies arising within the fiscal statutes. His jurisdiction, ab-initio is confined to bad management and does not, and should not, extend to good management.

It emerged that the creation of the FTO as a remedy to corruption was incorrect. While it was fair to assign objectives provided in sub-section (4) of Section 9 to a regular external institution of the FTO, it was equally awkward to provide him access to individual administrative lapses to any extent and for any purpose as generalized in sub-section (1) and specialized in sub-section (2) of Section 9.

It provides an incentive to make excesses and seeks more scope to justify its own existence. This happened all the more when a small investigative office of the FTO was filled by a Judge of the Supreme Court.

Though retired, how could a person enjoying the highest judicial jurisdiction all over the country survive in an inferior office of the FTO, whose entire scope is confined to 'advice' and 'recommendations'.

The position of the incumbent FTO was exploited by proverbial pressure groups thriving on 'monopoly' and 'cartels' by coaxing him to transgress into an area which was not basically carved for him.

It was seen that the real beneficiaries of the FTO are the most powerful, mighty business magnates and professionals, who even otherwise have complete domination over government policies through the IMF and the World Bank, and assessing officers through bar associations, and other similar institutions and organizations patronized by them.

The FTO office has been another pleasant addition to these institutions for exclusive benefit of business tycoons having complete grip and control over the entire urban economy of the country.

The corporate sector constituted by multinational companies raves of contributing the lion's share to our public exchequer without disclosing the proportion of tax due under law safely and securely evaded by it.

The chart, in earlier paras, reflects tax evasion in collusion with the collecting machinery, and more than that still remains undisclosed through their own ingenuity and sophisticated devices.

The utility of the FTO office is discussed with reference to centuries old supervisory jurisdiction of an IAC having remained operative from 1922 up to 2001 till the IT Ordinance 1979 was repealed and succeeded by another IT Ordinance 2001.

The new IT law is revolutionary. It has converted departmental assessment of income to the Universal Self-Assessment Scheme (USAS) by the assessee himself, and has demolished the centuries old structure of IT authorities by abolishing the supervisory jurisdiction of the IAC over the performance of the DCIT and further down-grading the CIT from heading the field staff to the position of a ranger watching and warding the boundaries of assessment.

More than 80 per cent of the tax being collected through automatic deduction at source under 'presumptive and withholding taxes and the remaining 20 per cent is left to the USAS. Where are thin chances left for the FTO to rectify mal-administration, if any.

If Ordinance 2001, becomes effective from 01/07/2003, the need for judicial remedies provided within the Ordinance would also be eliminated. It is high time that President assigned the FTO Ordinance promulgated in 2000 for an opinion from the author of the Ordinance 2001 regarding two questions:

(a) Whether he has provided an in-built mechanism and methodology within the Ordinance to undo mal-administration?

(b) Whether there is any scope for creating a new external agency like the FTO, and if so, what should be his field of activities to avoid duplication of the same work?

While creating the FTO, President selected the best from superior judiciary for keeping an eye on the 'ability' and 'integrity' but escaped the 'assertiveness'.

Little did he realize that he was confining the proverbial 'giant' into the 'bottle' and the two could not co-exist for long; either the giant must demise or the bottle must explode. That is exactly what is happening now with the office of the FTO. It is strictly my personal opinion that let the bottle explode instead of the giant dying.

It is a common knowledge that the jurisdiction of the FTO is being utilized on facts without cost, by the same elite who profusely utilize the Superior Court's constitutional jurisdiction of Writ on Law, at their pleasure, of course on payment of costs. How long will the state of Pakistan continue to groan under the heavy load of the cruel rich shorn of conscience.

In all sincerity I urge the President to place both the FTO Ordinance 2000, as well as the ITO 2001, for standing the public scrutiny of parliamentary debate instead of privileged pressure groups.

Let me conclude that the soul-stirring pleasant winds of change have started blowing on the eastern horizon in the legal concept of public finance and taxation, by mending the old western legal dictum "avoidance of tax being legally permissible against the evasion of tax being punishable".