The Appellate Tribunal Inland Revenue (ATIR) has criticized the Federal Board of Revenue (FBR) for employing tactics to delay and deny legitimate tax refunds. The tribunal has observed that the FBR is using technicalities such as time limitations and reclassification of taxes to block refund claims.
Key Issues Raised by the ATIR:
- Time Limitation Abuse: The FBR is excessively using time limitation arguments to reject refund claims, despite taxpayers complying with legal timelines.
- Reclassification of Taxes: The FBR is altering the nature of taxes to prevent refunds, converting adjustable taxes into final taxes.
- Disregard for Court Orders: The FBR is ignoring previous rulings by higher courts, including the Supreme Court, which have addressed similar refund issues.
The ATIR has emphasized that such tactics are unfair and unjust to taxpayers. The tribunal has called for the FBR to adhere to legal principles and avoid using technicalities to deny legitimate refund claims.
Impact on Taxpayers:
The FBR’s actions are causing significant financial hardship to taxpayers who are entitled to refunds. Delayed refunds can negatively impact businesses’ cash flow and overall financial health.
Need for Reform:
The ATIR’s ruling highlights the need for reforms within the FBR to ensure timely and fair processing of refund claims. The tax authority should focus on substantive issues rather than technicalities to resolve tax disputes.
