Supreme Court urged to take notice of FBR’s discretionary powers

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday urged the Supreme Court of Pakistan to intervene into the newly-enacted law, empowering the officials of the Federal Board of Revenue (FBR) to make arrests for concealment, a statement said.

FPCCI acting president Nasir Khan said that Section 203A of the Income Tax Ordinance, 2001, which was introduced through the Finance Act, 2021, is equivalent to the National Accountability Bureau’s (NAB) law and the provision should be added to make the revenue board accountable; if it cannot establish any corruption or tax evasion.

“This Section 203A also violates the basic rights and the honourable Supreme Court should intervene to protect the businessmen of the country,” he added.

Khan criticised Section 203A of the budget, which empowers and expands the discretionary powers of the FBR, and said it would only result in an increase in corruption and harassment.

Although Section 203A has been amended through the introduction of slabs, still the FPCCI is of the view that the powers to arrest and prosecute will create fearful and discouraging environment for the Small and Medium Enterprises (SMEs).

The FPCCI acting president lamented the government for not incorporating the practical, business-friendly and growth-promoting proposals of the FPCCI in the budget.

He said it is a gross negligence on the government’s part to ignore the apex trade body of Pakistan’s business, industrial and trade community.

Khan also said a blanket exemption for the federal excise duty has been given to the Federally-administered Tribal Areas (Fata) and the Provisionally-administered Tribal Areas (Pata); without surveying and quantifying the genuine needs and the total demand of Fata and Pata population. This will render industries in adjacent regions and across the country uncompetitive in comparison to those industrial units, which are exempted from the federal excise duty in these areas.

There is a strong possibility that the industrial units may exploit the federal excise duty exemption and utilise it to produce for regions other than Fata and Pata, he said, adding that there must be a strict mechanism to avoid the misuse of the federal excise duty exemption and subsequent prosecution.

Khan also expressed concern over the FBR’s delay in the consultative process on the FPCCI recommendations on the tax system reforms and simplification of tax rates, despite issuance of the directives by the prime minister.

Federal Finance Minister Shaukat Tarin had promised that the budget will not be made without consulting the FPCCI but unfortunately, that promise was also not kept, he added.

Khan suggested that corporate courts should be established in the country to counter and balance the weak policies of the successive governments and ensure protection to the SMEs.

Surprisingly, the revenue board has made a banker the head of its budget anomalies committees, who has no understanding of trade, SMEs and economic affairs.

Zakaria Usman, convener of the Budget Advisory Council of the FPCCI, said that the government should ensure consistency of policies to encourage investment in the country.

The FPCCI urged Prime Minister Imran Khan to intervene in the matter and resolve it. The FPCCI is ready to resolve all outstanding issues through discussion and a mutually-beneficial dialogue, he added.

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