Pakistan’s Federal Board of Revenue (FBR) is working towards harmonizing tax recovery procedures for income tax, sales tax, and federal excise duty. This initiative aims to create a more consistent and efficient system for collecting tax dues.
Current Situation:
- Different recovery procedures exist for each tax type, leading to potential confusion and inconsistencies.
- The Income Tax Ordinance offers taxpayers a 7-day grace period after a demand notice before recovery action begins (if no restraining order exists).
- Sales Tax and Federal Excise Duty lack a similar provision, but the FBR instructs field offices to provide a 7-day window before starting recovery after an appellate forum confirms an order.
Proposed Changes:
- The FBR plans to issue uniform recovery rules as part of the 2024-25 budget to streamline the process across all three tax categories.
- This could potentially include a standardized 7-day grace period for all tax types before recovery action commences.
FBR’s Stance on Legal Compliance:
- The FBR emphasizes adherence to court orders and directives from judicial authorities.
- They confirm that tax recovery will not be pursued if a restraining order exists.
- The aim is to ensure taxpayers have adequate time to seek legal recourse.
Commissioner of Inland Revenue (Appeals):
- The article clarifies that while the Commissioner falls under the FBR’s administrative structure, the legislature grants them judicial independence.
Overall, this move by the FBR indicates a commitment to creating a fairer and more transparent tax collection system in Pakistan.
