The matter, why taxpayers are hesitate to register with Inland Revenue department come under discussion in the Executive Committee meeting of Sheikhupura Chamber of Commerce & Industry (SCCI). The members express their views and suggested following points to defuse the fear of taxpayers, which they face on different stages in tax department and ultimately a negative signal passed to citizens to avoid registration with tax department and prefer to work under proprietorship instead of working in Private Limited companies. The members suggested dialogue with the FBR is only solution to overcome these problems which are being experience by the taxpayers across the country. In this regard a research report was prepared by the Research & Development Department of SCCI we are giving below the crux of report for your favorable consideration and to remove the fears of taxpayers.

·         First of all please centralize the computer system in order to overcome in the adjudication process. Individual computer should be linked with the computerized system so that addition and deletion by the concerned tax officers should be identified in case of dispute between the taxpayer and tax officer.

·         E-filling for “Appeals” should be implemented by the FBR in the Inland Revenue offices across the Pakistan.

·         There should be a choice of submitting appeals of the Income Tax Commissioner’s decision through e-services and receipts of such appeals should be generated online and a copy of which should be sent to applicants.  

·         Sincere efforts should be made to serve all notices or copies of all notices to tax payers through e-services.  There have been many instances where only empty envelops without concerned documents have been delivered to tax payers and consequently taxpayers face many difficulties including “Time Bard Problems” and concerned officers decide their cases ex parte. However when a taxpayer appeared before the tax officer after receiving ex parte decisions he / she must be given full opportunity to be listen and taken onboard to avoid his / her financial business and credit loses and other complication like cassation of accounts, force withdrawal of amounts from bank accounts due to which utilities, salary of staff and other payments could not be made to concerns. The party loses his / her credibility in the market i.e. why concerned taxpayers are being blackmailed by the concerned tax staff. Resultantly the taxpayers started campaigning against the tax collection authorities among the masses to avoid registration in tax department. However at last the healthy campaign of FBR for collection of taxes failed to achieve their tax targets.

·         In Europe and USA tax officers visit the premises of non-compliant taxpayers frequently to show their solidarity with the taxpayers. This kind of sympathetic attitude restores the confidence of taxpayers and such practice should be adopted in Pakistan.

·         Taxpayers are highly discouraged and hesitate to register with the Income Tax / Sales Tax departments and prefer to work under Proprietorship and non-register firms to avoid complication in Private Limited Companies / register firms.

·         Every Taxpayer submits twelve returns of sales tax and one return of Income Tax every year. However, if any omission inadvertently occurs in the returns, the tax officers decide the case retrospectively and do not set aside the minor mistakes. Furthermore, tax officers do not guide the taxpayers to remove the “Error” in tax returns but instead deal him like an enemy. Such attitude of tax officers should be discouraged in order to restore the confidence of taxpayers.

·         So far as the Composite Audit 2011 is concerned the decisions of High Courts and FTO have not been implemented as collective binding but inpersonam by the inland revenue officers/commissioners appeals based on their own whim and discretion.

·         Discretionary power over imposing fine and penalty should be based on principle of justice rather an administrative decision.

·         Inland Revenue Commissioner Appeals must be law graduate having practical training in concerned tax academies or in National Instituted of Public Administration (NIPA).