ISLAMABAD: When Imran Khan, the opposition leader, would say that people did not pay tax because of their mistrust on the government, an advisory committee of eminent experts, constituted by Federal Tax Ombudsman, was busy in preparing a report to diagnose the problem and subsequent solutions.
Among other prescriptions, it drafted Taxpayers’ Bill of Rights (TBR) to inspire their confidence on the government. The report was furnished and uploaded on the FTO website by Dr Shoaib Suddle, then FTO, left the office and report is still there without getting due attention. Instead, the previous government formed a Tax Reform Commission but its recommendations were not implemented either.
As PTI government took charge amid high hopes, the revenue collection dipped further touching even a historic low and it suggested Imran Khan was unable to regain the confidence of taxpayers. Mukhtar Ahmed Ali, who was part of the advisory committee, drafted TBR to invite attention of the government on the bill of rights.
Founder of Center for Peace and Development Initiatives, Mukhtar is a prominent transparency rights activist. He has served as information commissioner of Punjab RTI Commission.
In the beginning of this month, he wrote letters to Prime Minister Imran Khan, Finance Minister Asad Umar, State Minister for Finance Hammad Azhar and Chairmen of Standing Committees on Finance in Senate and National Assembly both. None of them has replied so far. A reading of TBR suggests its implementation will not only inspire the confidence of taxpayers, it will also be a great step forward towards changing the mindset of tax administration.
Taxpayers’ Bill of Rights has been designed with a purpose to provide best quality services by helping them understand and meet their tax responsibilities; ensuring the government frame and practice tax laws and policies with integrity and fairness.
The proposed bill of rights grants nine rights to a taxpayer: right to information and assistance; right to privacy and confidentiality; right to professional, fair and courteous services; right to representation and be heard; right to fair and just tax system; right to timely and remedial actions; right to administrative review and right to judicial review.
Above all of them are governing principles which are also related to the rights as it requires the government not to levy any tax without approval from Parliament meaning thereby no taxation through SROs. Also, it has been demanded, that taxpayers concerned be consulted before imposition of any new tax. For example, if it to be levied on salaried class, they should be consulted. Likewise, different industrial sectors and traders community should also be consulted before imposition of a new tax.
Right to information and assistance requires the FBR to provide taxpayers on demand complete, accurate, clear and timely information regarding the basis for and amount of any tax, penalty or refund owed. A taxpayer must be informed what is being taxed and procedure of payment. Moreover, FBR shall explain a taxpayer’s right and assist him in protecting those rights. A taxpayer shall also have a right to speedy information about various categories like number of taxpayers, tax defaulters, filers versus non-filers, current and development budget, refunds, status of tax related cases in courts and tribunals, role and responsibilities of various officers etc. FBR shall also pro-actively disclose information of public interests.
Right to privacy demands FBR of maintaining confidentiality of taxpayer information (except as authorised by law). Right to professional, fair and courteous service requires FBR to serve taxpayers in a befitting and expeditious manner. A taxpayer will be entitled to lodge a complaint with a senior officer in the event of improper behaviour of a dealing staff. If the supervisory officer does not entertain complaint to the satisfaction of the aggrieved taxpayer, he can have recourse to the FBR member concerned and onward to chairman.
Right to representation and be heard entitles taxpayer the right either to present himself in person or through an appointed representative. If a taxpayer (or his representative) during an interview seeks time to consult an expert, he shall be obliged and FBR stop and reschedule the interview.
Fair and just tax system is yet another right of a taxpayer which shall protect him from perverse and arbitrary, unreasonable, biased, oppressive or discriminatory decisions, processes and recommendations by FBR. A taxpayer is responsible for paying only the correct amount of tax due under the law; neither more nor less.
A taxpayer also shall have the right, according to the draft, for timely remedial action against illegal and arbitrary acts of FBR and entitled to relief from penalties and interest under tax legislation because of extraordinary circumstances. FBR shall waive penalty if taxpayer can show that he acted reasonably in good faith or relied on the incorrect advice of an FBR employee. It shall also waive interest that is result of certain errors or delays caused by an FBR employee.
A taxpayer has the right to administrative review by the Federal Tax Ombudsman and subsequently any representation before the President of Pakistan. He has the right not to pay tax amount in dispute unless Tax Ombudsman directs so. Tax Ombudsman shall help a taxpayer to enforce the rights granted under this charter.
A taxpayer has the right of appeal or review of his case before an independent judicial tax appellate system if he disagrees with FBR about the amount or his tax liability or FBR collection actions. A taxpayer has the right to seek additional judicial remedy in court.