Federal Tax Ombudsman (FTO) Dr. Muhammad Asif Mahmood Jah, has directed officials to investigate the issue of the minimum tax computational formula that was approved by a policymaker of the Federal Board of Revenue (FBR).

The FTO Office has sent a notice to the tax machinery for the launching of an investigation into the issuance of a contentious letter under section 153(1) (b) of the Income Tax Ordinance, 2001, dealing with the minimum tax computational formula, as reported by Business Recorder.

Official notices were issued to the Secretary Revenue Division and Member (Policy) FBR after a tax lawyer filed a public complaint against the alleged reprobate.

The petitioner argued in written petition 57220/2021 titled ‘Shahid Latif Khilji versus the Federation of Pakistan’ at the Lahore High Court (LHC) that the “FBR IRIS portal for the online submission of income tax returns (“IRIS”) was not letting the Petitioner file his income tax return as per the self-assessment regime envisaged in the Income Tax Ordinance, 2001. Instead, IRIS was imposing its own calculations on the petitioner”.

If the option endorsed by the Member Inland Revenue (IR) Policy was not withdrawn and implemented, the FTO notice mentioned:

(a) would it have an adverse impact on the whole scheme of Income Tax Ordinance, 2001, governing minimum tax regime or not, and

(b) would income tax deducted under various provisions of Income Tax Ordinance, 2001 become adjustable income tax against income accrued outside the scope of these provisions enforcing minimum tax regime or not?

The notice further questioned ‘how and why was a contrary hypothetical example accepted by the FBR’s Member-IR Policy if the calculation technique controlling filing of income tax returns, which was contested at LHC, as FBR’s official stance?’ It was either a single man’s decision or an institutional agreement, as per the notice.

Prior to the FTO notice, the petition against the Member IR was held at the LHC. The FBR’s Chief Information Officer, Nouman Malik, attended the hearing and promised to look into the matter raised by the petitioner and rectify it after following the protocol.

The LHC settled the case based on the given undertaking, and the bench stated unequivocally while dismissing the petition that issues over tax calculation and apportionment are systemic in nature and beyond the scope of the court’s constitutional jurisdiction.

Source: Pro Pakistani