The latest move by the Federal Board of Revenue (FBR) can become detrimental to the government’s policy of mollycoddling the business community in order to grow the economy. On Monday, the FBR mentioned that it will no longer warn taxpayers before freezing their bank accounts in case they are found to be defaulters. Two-year ago, the then FBR chairman Shabbar Zaidi had ordered officers to inform tax payers prior to freezing their accounts. However, the FBR withdrew this order and now have complete impunity to freeze accounts of tax evaders.
The business community is undoubtedly unhappy. Afterall, Finance Minister Shaukat Tarin has time and again assured the community of devising business-friendly policies. It was this policy that drove the government to provide subsidies to businesses last year to help ease the pressure of the coronavirus pandemic and its subsequent lockdowns. As a result, the Business Confidence Index survey in August recorded an increase of 59 points. The government’s pro-taxpayers’ posture is also derived from its interest of achieving a growth rate of up to four percent in the remaining two-years of its tenure. However, the FBR’s amendment in its previous policy can jeopardize this goal. The question then arises why did the country’s tax machinery not take the ruling party into confidence before making this change?
The FBR in the past has been accused of harassing businessmen for resorting to high-handed tactics to extort money from taxpayers. Under pressure of achieving targets, the taxmen would recover huge sums on weak grounds. This is not to say that tax theft isn’t a reality of this country, but better mechanisms must be put in place for the FBR to collect taxes than resort to autocratic measures. The premier has in the past shown his desire to launch a comprehensive track and trace system that would digitize the economy and avoid physical interactions. The government should work towards making this a reality in all sectors as TTS would improve revenue and curb tax evasion.
The FBR has been showing a progress in its tax collection with its latest revenue accounting to Rs 1,395 billion in the first quarter of the current financial year. It thus needs to be empowered to do its job but correctly. As for tax dodgers, they must be reminded that tax evasion is a criminal offence and stern actions will be taken when found guilty