The National Board of Revenue has taken an initiative to curb the intervention of senior income tax officials, including income tax commissioners, on the assessment of income tax files as such unauthorised interference causes unusual delay in tax file disposal process.
There are also allegations from taxpayers and tax lawyers that intervention of senior officials increases the scope for harassment and bribery in the name of speed money.
NBR officials said that income tax wing had decided to review the outcome of tax assessment orders made by income tax commissioners in 31 income tax zones.
It has already sought information related to differences between the amount of payable income tax before and after making intervention of income tax commissioners on the assessment, they said.
Tax inspection and training wing of the NBR in a recent letter asked all commissioners in 31 tax zones to provide the detailed information related to intervention of tax commissioners in the assessment process for the period between July, 2018 and December, 2019.
The letter, signed by NBR first secretary Khandaker Khurshid Kamal, sought information related to draft tax assessment approval made by the commissioners.
The information include name of taxpayers, taxpayers’ identification numbers, tax year, payable tax as per draft tax assessment order and differences of payable taxes after approval by the commissioners.
Officials said that the NBR took the initiative to examine the effectiveness of involvement of tax commissioners and other officials such as additional and joint commissioners.
According to the Income Tax Ordinance-1984, a deputy commissioner of taxes (DCT) is empowered to assess the tax files to determine payable taxes, they said.
But in most cases, income tax zones involve joint commissioners, additional commissioners and tax commissioners in the assessment process through administrative orders due to an absence of central guidelines from the NBR on the issue, they added.
Taxpayers also allege that different tax zones treat a tax file differently, based on the level of intervention of high ups as there is no uniformity in administrative orders issued by tax zones.
The level of involvement of senior officials is determined by the level of income shown in the tax file of a taxpayer.
Though a DCT is solely responsible for tax file assessment process, commissioners get involved themselves in the process following a provision of the income tax ordinance, which instructs a DCT to follow the orders of their supervisors.
In many cases, commissioners and other senior officials force the DCT to refer the tax files to them.
A senior NBR official, however, told New Age that there were mixed outcomes of intervention of commissioners and other senior officials.
The involvement of senior officials can increase the intensity of harassment of taxpayers and the volume of speed money, he said.
Such involvement, however, can ensure proper tax collection through increasing the quality of assessment as commissioners and other senior officials have long years of experience in assessing tax files while a DCT has experience in tax administration only for few years, he said.
The NBR will settle the dilemma after getting report from field offices, he said.
Usually, intervention of tax commissioners hardly increases the amount of tax demand, he added.
On the other hand, in many cases, intervention of joint and additional commissioners is required considering the complex nature of tax files and intensity of tax files.
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