FBR wants powers to access bank accounts, seek private information

ISLAMABAD: The FBR is seeking extraordinary powers to access private bank accounts of citizens, apparently to catch tax dodgers, locate assets beyond means, sources of funds, detect foreign travels and raise revenue for the government.

For the purpose, the FBR has recommended that its intelligence wing be allowed to perform these highly sensitive tasks which many fear could be vastly misused by any corrupt administration to extort money and blackmail citizens.

According to a presentation made by the Director General Intelligence and Investigation (I&I) during the commissioners conference, which was chaired by Finance Minister Ishaq Dar, there were some pre-requisites for nabbing tax evaders and ensuring tax compliance in the country.

The DG I&I has recommended that an MoU may be signed with Nadra to access necessary information of taxpayers regarding their family identification, foreign travel data, etc. “The Director General, I&I, may be allowed to access bank accounts of taxpayers under Section 165A and necessary amendments should be made in the rules accordingly,” he further recommends.

The FBR also wants to sign a memorandum of understanding (MoU) with the anti corruption watchdog, NAB, to obtain information related to cases particularly pertaining to assets beyond known sources.

The FBR has also sought secret service funds for informers in order to obtain authentic information about tax dodgers, which can yield potential revenues.The FBR has sent this case to the Finance Division for relaxing rules, allowing them to put in place secret service funds.

An MoU with the State Bank may be signed to access accounts of depositors in pursuance of reports generated by the State Bank, particularly Anti Money Laundering (AML) and Suspicious Transaction Reports (STRs), to combat tax evasion.

For hiring reputable lawyers, the DG I&I has recommended to the government to allocate required funds for effective defence in courts.As the cases investigated by the I&I-IR carry huge revenue potential, funds are required for effective defence before courts.

To keep the officers/staff of the I&I-IR motivated and to attract honest and diligent officers, an honoraria/reward system, on the lines of Customs Intelligence, needs to be introduced.For monitoring of cases of I&I on real-time basis, dedicated software needs to be developed and domain team to be provided by PRAL, supported by officers of I&I for development & implementation of the software.

Regarding compliance issues, the DG I&I states that owing to contumacious behaviour, adversarial relationship, turf issues and general apathy, cases/reports sent by I&I IR do not get the attention and priority they deserve and often remain unattended for days, if not weeks.

No dedicated Unit/Cell is established by LTU/RTOs which could be assigned special jurisdiction to process cases/reports sent by the I&I.Potential revenue yielding cases, with solid documentary evidence, are either dealt with in a slipshod manner or deliberately allowed to degenerate by accepting flimsy and untenable evidence provided by tax defaulters.

There is a lack of institutionalised mechanism to facilitate and ensure an expeditious disposal of all such cases.There are poorly managed business processes which allow corruption and malfeasance to creep into the system.

In certain cases, even returns of income and wealth statements were not enforced, show cause notices remain without compliance and no further action was taken, demand created but not recovered in cases, proceedings were finalised and penalties imposed but not recovered.

Other proposals to improve the system include: Standard Operating Procedures (SOPs) for monitoring and expeditious disposal of cases may be developed. In the wake of suspension of SRO 351 of 2014, there is a need to put in place an effective institutionalised mechanism to improve compliance and ensure better enforcement in cases.

The investigating officers need to be trained for effective prosecution involved in tax fraud cases and staff/guards are required to be trained in weapon handling.Official website of I&I (IR) should be launched to encourage general public to lodge complaints against tax evasion and tax fraud.

Drop boxes may be placed at offices of the field formations and prominent commercial areas to widen the platform for lodging complaints.The official page of Facebook and twitter account may be publicised widely to keep the general public aware of anti-tax-evasion steps taken by the I&I.Access to Computerised Risk-based Evaluation of Sales Tax (CREST) database may be granted to all directorates of I&I.