No Warning from FBR before freezing taxpayers bank accounts

Freeze of Bank accounts without intimation to taxpayers by FBR
  • Previously, FBR had to inform taxpayers 24 hours prior to freezing their bank account. 
  • Business community and tax bars are disappointed over FBR’s decision.
  • Business community says FBR’s decision will be a hurdle for ease of doing business. 

The Federal Board of Revenue (FBR) has withdrawn its clause that directed the Board to warn taxpayers 24 hours prior to freezing their bank accounts.

The business community is not happy over the development and has termed it as a harassment” of tax filers, as per media reports. 

Previously, Former FBR chairman Shabbar Zaidi had made it mandatory for the tax collectors to intimate defaulters before suspending their bank account, keeping the FBR chairperson in the loop.

“I am further directed to state that in order to implement the law in its true spirit and to re-vest the power vested in the institution of the Commissioners viz-a-viz action under Section 140 of the Income Tax Ordinance, 2001, the instructions referred supra are hereby withdrawn ab-initio,” said Hammad Hussain Jaffri, Secretary Inland Revenue Operations FBR, in the official notification on Monday.

“Do taxpayers have any rights?” wondered President Karachi Tax Bar Association (KTBA) Muhammad Zeeshan Merchant, saying that those already filing income tax returns and paying taxes will be at a disadvantage due to the latest development. 

“It’s very sad. Instead of gaining their confidence, the tax authority is disillusioning the taxpayers,” he added. He wondered why the Board does not go after people who were non-filers or evading taxes and as a result, increase the tax net. “FBR again chooses to burden the people who are already in the tax net,” he stated. 

Karachi Chamber of Commerce and Industries (KCCI) President Mohammad Idrees said the government had been claiming to improve ease of doing business for investors. However, he said the move to revoke this clause would have negative repercussions for the business community

He said the move will be a setback for ease of doing business, adding that it will “certainly shatter the trust and confidence of the business community.”

Former chairman FBR Shabbar Zaidi spoke to media, expressing disappointment over the decision. He said the clause had been introduced to ensure taxpayers were not harassed.  

“I am personally sorry to hear the withdrawal of the first instruction issued when I joined as chairman FBR,” said Zaidi. “[There should be] no freezing of bank accounts without intimation and approval from chairman FBR. It was a major relief to taxpayers. I urge the prime minister, finance minister, and chairman FBR to reinstate it [the withdrawn clause],” Zaidi added.

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