federaltaxombudsmanfactsheet

AOA Fact Sheet Federal Tax Ombudsman, Pakistan NOVEMBER 14, 2009

Legal Framework

INSTITUTIONAL OVERVIEW NUMBER 1

The Office of Federal Tax Ombudsman (FTO) Pakistan was established through Ordinance No. XXXV of 2000 called "Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000". The objective is to promptly, justly, fairly and independently diagnose, investigate, redress and rectify any injustice done to a taxpayer through maladministration of tax employees of Federal Board of Revenue (FBR)/Revenue Division, Government of Pakistan. Tax maladministration defined (a) A decision, process, recommendation, act of omission or commission which• is contrary to law, rules or regulations or is a departure from established practice or procedure, unless it is bona fide and for valid reasons; • is perverse, arbitrary or unreasonable, unjust, biased, oppressive, or discriminatory; • is based on irrelevant grounds; or • involves the exercise of powers, or the failure or refusal to do so, for corrupt or improper motives, such as bribery, jobbery, favouritism, nepotism and administrative excesses; (b) Neglect, inattention, delay, incompetence, ineptitude, in the administration or discharge responsibilities;

inefficiency and of duties and

(c) Repeated notices, unnecessary attendance or prolonged hearings while deciding cases involving: • • • • •

assessment of income or wealth; determination of liability of tax or duty; classification or valuation of goods; settlement of claims of refund, rebate or duty drawback; or determination of fiscal and tax concessions or exemptions;

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(d) Willful errors in the determination of refunds, rebates or duty drawbacks; (e) Deliberate withholding or non-payment of refunds, rebates or duty drawbacks already determined by the competent authority; (f) Coercive methods of tax recovery in cases where default in payment of tax or duty is not apparent from record; and (g) Avoidance of disciplinary action against an officer or official whose order of assessment or valuation is held by a competent appellate authority to be vindictive, capricious, biased or patently illegal.

Jurisdiction/ Functions

The Federal Tax Ombudsman Pakistan has jurisdiction to investigate any allegation of the maladministration. The FTO Ordinance, the FTO’s responsibilities include dealing with: • • • • • • •

a complaint by an aggrieved person; a reference by the President of Pakistan; a reference by the Senate of Pakistan; a reference by the National Assembly of Pakistan; a motion of the Supreme Court during the course of any proceedings before it; a motion of the High Court during the course of any proceedings before it; and suo moto action.

 The Federal Tax Ombudsman has the same powers as a civil court under the Code of Civil Procedure, 1908, in respect of the following matters, namely:

Legal Powers

• • • •

summoning and enforcing attendance of any person and examining him on oath; compelling production of documents; receiving evidence on affidavits; and issuing commission for the examination of witnesses.

 The Federal Tax Ombudsman has the power to require any person to furnish information that may be relevant to the subject matter of any investigation being conducted by or under his orders.  The Federal Tax Ombudsman or any authorized Staff Member, for the purpose of making any investigation, has the power to enter any premises where he or such member has reason to believe that any 2

article, book of accounts, or any other document relating to the subject matter of investigation may be found, and may: • • • •

Search such premises and inspect any article, book of accounts or other document; Take extracts or copies of such books of accounts and documents; Impound or seal such articles, books of accounts and documents; and Make any inventory of such articles, books of accounts and other documents found in such premises.

 The Federal Tax Ombudsman has the same powers, mutatis mutandis, as the Supreme Court of Pakistan to punish any person for contempt, who: • •

• •

Abuses, interferes with, impedes, imperils, or obstructs the process of the Federal Tax Ombudsman in any way or disobeys any of his orders; or Scandalises the Federal Tax Ombudsman or otherwise does anything which tends to bring the Federal Tax Ombudsman, Staff Members, nominees of the Office, or any person authorised by the Federal Tax Ombudsman in relation to his Office into hatred, ridicule or contempt; or Does anything which tends to prejudice the determination of a matter pending before the Federal Tax Ombudsman; or Does any other thing which, by any other law, constitutes contempt of court.

 The Federal Tax Ombudsman is empowered to award compensation to any aggrieved person for any loss or damage suffered due to maladministration of any tax employee and such compensation is recoverable as arrears of land revenue. •

Organizational Structure

The Federal Tax Ombudsman has the authority to informally conciliate and amicably resolve or settle any tax-related grievances of a complainant.

The Regional Office, Federal Tax Ombudsman, Karachi (14th floor, NIC building, Abbasi Shaheed Road) is functioning since April 2001. The Regional Office, Lahore (Bungalow No.186-A, Scotch Corner, Upper Mall) is functioning since June 2001. Regional Offices in Peshawar and Quetta are to become operational w.e.f. 3

1st January 2010. More Regional Offices are planned to be established in other major business and industrial cities of Pakistan to extend the FTO outreach.

Implementation Arrangements

The Revenue Division is required to implement decisions of the Federal Tax Ombudsman and inform the Office of FTO about the action taken 4

within 30 days. If the Revenue Division does not comply with any recommendation of the Federal Tax Ombudsman or does not give reasons to the satisfaction of the FTO for non-compliance, it is treated as “Defiance of Recommendations” entailing disciplinary action and/or contempt proceedings against the defaulter(s). A separate wing at the Office of the FTO monitors implementation of all cases decided by the FTO.

Research & Analysis Wing

Investigative Techniques

A Research & Analysis Wing has been set up and its capacity is being enhanced to meet the current needs.

When the Federal Tax Ombudsman decides to conduct an investigation under the FTO Ordinance, the following steps are taken: 1. 2. 3.

4.

5.

PGR(Public Grievance Redress) Rules & Standards Freedom of Information

Notice is issued to the Revenue Division along with copy of the Complaint for written reply usually within 14 days or earlier if the matter is of an urgent nature. The written reply of the Revenue Division is sent to the Complainant along with the notice of hearing. The Complainant may appear for hearing in person or through his legal attorney. The Complainant and Representative of the Revenue Division are given full opportunity to explain their position. The investigations are conducted in private. After hearing the Complaint, a Finding/Recommendation is given in writing and if maladministration is established then the Revenue Division is directed to take corrective measures within the stipulated time. The Revenue Division reports compliance within the stipulated time to the Federal Tax Ombudsman.

Regulations for Public Grievance Redress are being simplified to make these more user- friendly.

Section 19 of the Freedom of Information Ordinance 2002 provides that if any person is denied access to information related to Revenue Division, 5

(FOI)Standards

he/she can file a complaint with the Federal Tax Ombudsman to seek such access.

Use of Technology

The Office of Federal Tax Ombudsman is as yet functioning on manual system. A comprehensive IT plan is underway to transform Office of FTO into a modern IT-driven organization. This will enable the FTO to expand its outreach to the taxpayers. The plan includes:        

Development and Implementation of Web Portal Management Information System Online Complaint Management System Automated Decision Support System Automated Data Retrieval System Data Security System Human Resource Management System Accounts, Inventory Control, Library Applications etc.

Public Awareness & Outreach

Public seminars and meetings with tax and trade bodies are held frequently for the purpose. The electronic/print media also plays a critical role in advocacy.

Linkages with Civil Society

The Federal Tax Ombudsman Pakistan is one of the 163 voting members of International Ombudsman Institute (IOI) established with the objective of promoting the concept of Ombudsmanship, encouraging and assisting research, and developing and operating educational projects and programmes.

The Federal Tax Ombudsman publishes an annual performance report incorporating landmark recommendations in serious cases of maladministration The FTO presents the annual report to the President of Pakistan and also places it before the Parliament.

The FTO Pakistan is also a member of Asian Ombudsman Association (AOA) which provides a platform for useful interaction with the Ombudsmen of Asian countries.

Parallel Complaint Redress Systems

The main institutions functioning parallel to the Office of FTO in redressing grievances of the aggrieved are as follows: • Parliamentary Committees • Supreme Court of Pakistan • Office of Auditor General of Pakistan • Prime Minister’s Inspection Commission • Federal Investigating Agency • National Accountability Bureau 6