Tax officials can arrest persons on concealment of over Rs25 million

Web DeskWeb Editor

30th Jun, 2021. 11:34 pm
Tax officials can arrest persons on concealment of over Rs25 million

ISLAMABAD: The tax authorities have given arrest powers to its officials in case of concealment of an amount over Rs25 million by a non-filer, according to an official document of approved financial proposals for the fiscal year 2021/22 made available on Wednesday.

However, the tax authorities will exercise the arrest powers where the person is a return filer but concealed an amount above Rs100 million.

The Finance Bill, 2021 has proposed to give blanket powers to the tax authorities to arrest persons for concealment of income, which was strongly resented by the business community and other stakeholders.

However, the National Assembly approved an amendment to this proposal under which a threshold has been prescribed for authorising the arrest powers to the tax authorities.

As per the Finance Act 2021, a new section 203B has been inserted to the Income Tax Ordinance, 2001 for the power to arrest and prosecute.

“Under the section, where on the basis of material evidence brought on record, as a result of audit conducted under the Income Tax Ordinance, 2001, an assessment is made or amended, and the assessing officer records a finding that the taxpayer has committed the offence of concealment of income, which has resulted in non-payment of tax of Rs100 million and above in case of a filer and Rs25 million or above in case of a non-filer, the taxpayer may be arrested after obtaining written approval of the committee.”

The committee for granting approval would comprise the minister for finance and revenue, the Federal Board of Revenue chairman and the senior most member of the revenue board.

All arrests made under the Income Tax Ordinance, 2001 would be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898.

According to the new section, where the taxpayer is suspected of the offence of concealment of income is a company, every director or officer of that company, whom the tax authorities have reason to believe, is personally responsible for actions of the company, contributing to the offence of concealment of income and would be liable to arrest.

It also said any arrest under the section would not absolve the company from the liabilities of tax payment, default surcharge and penalty imposed under the Income Tax Ordinance, 2001.

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