ISLAMABAD: The Federal Board of Revenue (FBR) has defied the Lahore High Court (LHC) order by not publicising the names of 545 tax defaulters, out of 1,070 members of national and provincial assemblies, in addition to others who contested elections but lost, a violation that could land the Bureau in trouble.

Over 23,900 candidates submitted nomination papers and majority of them were tax defaulters, however, the FBR, lost a golden opportunity to name and shame them quoting the LHC order. It showed reluctance to enforce the tax regime.

In a judgement handed on April 12, 2013, a three-member bench led by Justice Ijazul Ahsan had directed the FBR to share information with the Election Commission of Pakistan (ECP) about the candidates who are tax defaulters and display the list on the website.

The FBR did not do as directed. Going by its guideline sent to district returning officers, tax defaulters have been defined as “non-filing of IT returns tantamount to tax default.” The FBR did not offer any formal comment on this violation of the court order.

However, tax officials privy to the entire process argue that displaying the list of tax defaulters was violation of law but failed to explain the clauses of Income Tax Ordinance 2001 prohibiting them from the publication of this list. They did not answer either when asked that why a review petition was not filed if the FBR found itself unable to comply with the court order.

Our study named 461 (47%) lawmakers in national and provincial assemblies who, according to the FBR guideline, fall in the category of tax defaulters. There are another 84 lawmakers who claimed paying income tax but the FBR record out-rightly rejected it, meaning thereby they did not file tax returns as well. Including them would swell figure of tax defaulters to 545 (54%) lawmakers. Record of 54 members was not available for examination that could raise the number further.

The court had ordered the FBR to add two columns of information sent to the ECP in order to include the candidates who are tax defaulters and nature of their default. It reads: “On our query, the Director Intelligence, Federal Board of Revenue states that it would be possible to create another column …indicating if there is default in case of a particular candidate and the nature of such default.”

The judgment goes on: “The aforesaid exercise will be completed within a period of 3 weeks…Such information shall be made available on the websites of the FBR as well as of ECP.” Neither the directed information was passed on to the ECP nor displayed on the website.

An ECP official said they had taken up this issue with the FBR a month before the LHC judgment asking it to provide information about the tax defaulters but it was refused.

The News contacted the FBR spokesman who was out of city and advised this correspondent to speak to the DG Intelligence FBR Syed Ejaz Shah as his department was involved in this exercise. He neither attended the call nor responded to the text message carrying a question on the subject.

However, another FBR official who was also privy to the case defended the decision of not displaying the information of tax defaulters arguing that Income Tax Ordinance 2001 barred them from sharing these details. He quoted in the FBR’s defence section 216(1) of the ordinance that deals with disclosure of information and states that tax information is confidential and can only be shared in specific cases with the court or investigation agency.

As The News confronted him quoting sections 216(5) and 216(6) that over-ride section 216(1), he did not have an answer.Section 216(5) reads: “Nothing contained in sub-section (1) shall prevent the Board (FBR) from publishing, with the prior approval of the federal government, any such particulars as are referred to in that sub-section.”

When asked if the FBR sought government permission for releasing the directed information in the light of the court’s order regarding tax defaulters, the answer of the official was in negative.

Section 216(6) reads: “Nothing contained in sub-section (1) shall prevent the federal government from publishing particulars and the amount of tax paid by a holder of a public office as defined in the National Accountability Bureau Ordinance, 1999 (XVIII of 1999).”

The NAB Ordinance defines public office holders as present and former presidents, prime ministers, ministers, advisers and others. Going by this definition, there are many public office holders who participated in the 2013 elections and they were tax defaulters as well. Former prime minister Zafarullah Jamali, former CM KP Amir Haider Hoti and former minister Raza Hayat Hiraj and others have been identified in our study based on the FBR record as tax defaulters.The FBR officer was asked that section 216(6) allows tax authorities to publicise details even without seeking prior permission of the government. Again, he did not have any answer.

http://www.thenews.com.pk/Todays-News-2-224452-FBR-defies-LHC-order-may-land-in-trouble