Shaikh assures FTO of fewer review petitions

Finance Minister Dr Abdul Hafeez Shaikh on Monday assured that a mechanism would be devised to curb the Federal Board of Revenue’s (FBR) review petitions against the decisions of Federal Tax Ombudsman (FTO) to the President.
He made this assurance at the first meeting of the recently constituted FTO Advisory Committee.
In his speech, FTO Ombudsman Dr Muhammad Shoaib Suddle had raised the issue that some 20 to 25 per cent of decisions of FTO were withheld as FBR filed representation before the president. He said only four to five per cent cases were decided in the favour of the FBR.
He proposed that there should be some restraint on the FBR powers to file reviews before the president which require three to four years for resolution. He proposed that Finance Minister should approve the reviews filed by FBR or a larger bench of ombudsmen should look into reviews. .
Finance minister asked the FTO Advisory Committee to get briefings from the FBR on their performance and issues that affect the taxpayers. He said that the government was taking appropriate measures to reform the FBR and has already reformed the refund mechanism by establishing a central cheque issuance system at FBR, which had help curbed bribery in refunds.
FTO emphasised the protection of taxpayers from possible abuse by the tax authorities. He proposed the establishment of a reliable system of dispute resolution and complaint management at FBR as required under Section 7 of the FBR Act, 2007. The investigative capacity and skill sets of FTO Office should focus mainly on systemic issues elimination of which would benefit the taxpaying community in general rather than only those individual taxpayers who file complaints before the FTO, he added.
The FTO office intends to make a paradigm shift in its approach to dispute resolution. The best way to provide justice to taxpayer is through elimination of systemic issues of tax maladministration. It will reduce the need for making complaints every now and then on the same issues. Addressing systemic issues will spare a lot of management time of the tax administration which is presently being lost in avoidable litigation. It will also save the taxpayer a lot of entrepreneurial time and reduce his cost of doing business. This kind of a scenario will increase productivity of enterprisers on the one hand and optimize revenue by shifting of focus to curbing tax evasion and smuggling.
As far as redressing of individual complaints is concerned, it was stressed that FTO Office has been doing very well. Most of complaints are decided within 60 days. Some complicated issues may take a little more time. However, hardly any complaint takes more than 90 days to decide. The average time taken to investigate the complaints has been reduced from 117 days in 2009 to 67 days in 2010. The target is to further reduce it to 60 days in 2011. There is not a single complaint pending from the previous years. Presently, FTO Office is dealing with complaints filed during 2011. The ratio of FTO’s decisions in favour of the taxpayers is generally over 80 per cent.
Quick and inexpensive access to justice through the FTO mechanism has enhanced the taxpayers’ confidence for seeking redress from the FTO Office. However, addressing systemic issues is a different ball game. It requires not only the FTO Office but also the tax administration and the taxpayer community to eliminate systemic problems of tax maladministration. The constitution of advisory committee is a step in that direction. The committee will mainly address the systemic issues of tax maladministration. For this purposes, subject-wise sub-committees have been formed which will prepare their reports on the matters assigned to them. Their proposals will be implemented to promote and protect the taxpayers’ interests.
Apart from the constitution of the advisory committee, the Forum of Pakistan Ombudsman (FPO) has been constituted under the presidentship of FTO for mutual capacity building by better coordination among the 10 federal and provincial Ombudsmen of the country. An initiative has also been taken to achieve networking of Ombudsman of Islamic countries at the OIC platform.