ByThe Federal Board of Revenue (FBR) has come under scrutiny for failing to defend its position before the Federal Tax Ombudsman (FTO) in a case concerning the forced implementation of online integrated business systems and the privacy of taxpayers’ data. The case, filed by a Lahore-based taxpayer through advocate Waheed Shahbaz Butt, highlights several critical issues, including potential violations of taxpayer privacy and the questionable selection of a private company to manage sensitive fiscal data.
The crux of the complaint revolves around the enforcement of SRO 428, which mandates the online integration of businesses and the configuration of retail outlets with FBR’s e-computerized systems. The complainant alleges that this directive has imposed a significant financial burden on taxpayers, who are compelled to comply with costly integration requirements. Despite repeated reminders, the FBR has reportedly failed to submit comments or rebut the allegations, raising questions about its handling of the case.
In response to these concerns, the FTO has initiated an investigation to address potential violations of Section 216 of the Income Tax Ordinance, which safeguards the privacy of taxpayers’ data. The investigation will also examine whether the FBR’s selection of a private company for managing taxpayer information was lawful and transparent. Advocate Waheed Shahbaz Butt pointed to a precedent set by the Supreme Court in PLD 2021 SC1, which called for disciplinary and criminal proceedings against tax officials who breached taxpayer confidentiality.
The complainant further emphasized the need for comprehensive documentation and transparency from the FBR. Specific recommendations include the provision of detailed standard operating procedures (SOPs), flow charts of fiscal information shared with the private company, and an analysis of similar practices in other countries. Additionally, the complaint seeks clarity on the legal mandate for designating a single private entity to handle Point-of-Sale (POS) activities across Pakistan and the rationale behind the associated costs.
The FTO’s findings could provide much-needed relief to taxpayers who have struggled to comply with the FBR’s demands and faced hefty costs. Furthermore, the investigation’s outcome is likely to have far-reaching implications for the FBR’s policies and operational procedures. Critics argue that the lack of transparency and potential favoritism in the FBR’s processes undermines public trust and calls for immediate reforms to ensure accountability.
The resolution of this case will be pivotal in determining how taxpayer data is handled and protected in Pakistan. It underscores the need for robust safeguards to prevent misuse and maintain the confidentiality of sensitive financial information while balancing the government’s efforts to modernize tax administration systems.
