The Federal Board of Revenue (FBR) has taken stay orders against the Federal Tax Ombudsman’s (FTO) decision to investigate the offices dealing with offshore tax haven cases, stopping a move that could have pull out reasons behind slow recovery of $22 million as compare to $1.3 billion worth cases.

Due to complaints of “malpractices with corrupt motives”, the FTO office had taken a suo motu action by issuing notice and launched investigation to determine as to why FBR’s three field offices were failing in speed recovery of presumably $200 billion concealed abroad.

The FTO, in April this year, had served notice on the FBR, directing it to nominate officials for investigation of the three zones. The FTO had ordered the inspection of all the three offices on complaints of malpractices with corrupt motives in the discharge of duties, and maladministration.

Now, the commissioners of the two zones have gone to the courts and gotten the FTO’s orders suspended. Under the law, the FBR can file a representation before the president against the decisions of the FTO. But the FBR did not choose this legal path. “The FBR could have approached the president, had the decision to obtain the stay order been taken by the board,” said Dr Ashfaq in response to a question of media.

The FTO took suo moto action after the official record disclosed that the FBR headquarters forwarded $2 billion worth of 1,579 cases to three AEOI zones of Karachi, Lahore and Islamabad but the recoveries in about 1,150 cases were a mere $30 million as of March.

In case of Islamabad and Karachi, the recoveries were just below $22 million as of end March. The foreign currency accounts of Karachi AEOI zone reflect tax assessed was alarmingly low to the Lahore and Islamabad zones, according to the official documents. These papers showed that about 275 cases are yet to be decided out of total 899 assigned cases to the Karachi zone.

The FTO has also demanded an explanation from the FBR chairman and member Inland Revenue (IR) operations for not implementing its orders to nominate the officers. But the FBR informed the FTO that any further proceeding in the case may be pended and postponed till final disposal by the court cases, according to the FBR correspondence with the FTO office.

Federal Tax Ombudsmen (FTO) | Federal Board of Revenue (FBR) | Stay Order | Off shore Companies Cases | Investigation | Courts |