Taxpayers should be Taxed in Jurisdiction where Businesses are Located: FTO

The Federal Tax Ombudsman (FTO) has conveyed to the Federal Board of Revenue (FBR) that taxpayers should be taxed in the jurisdiction where their businesses are located.

The act of the FBR to transfer cases as a class of persons is not illegal and is within the ambit of the powers conferred by the Income Tax Ordinance, 2001. However, it is also evident that the transfer of the case from Quetta to Karachi has caused severe hardship to the taxpayer and it is his genuine right to be taxed in the jurisdiction by facilitating him at the doorstep where the business is located and is being done, FTO order added.

The taxpayers are engaged in the business of Builders/Developers and the Federal Board of Revenue vide its notification transferred the jurisdiction of the taxpayers as a class of persons who are engaged in the business of Builders/Developers from RTO, Quetta to Medium Tax Payers Office (MTO), Karachi.

According to the order, whether contractors involved in public sector construction can be clubbed with private sector builders and developers is yet another area that needs FBR’s deliberations. In any case, no discriminatory treatment with any individual or a class of persons is desirable.

The allegation that some of the similar cases have reportedly been transferred back to RTO Quetta also necessitates a probe by the concerned authorities at FBR HQs.

Some of the identical cases relating to KP and Balochistan are currently pending at superior judicial fora. Uniform treatment of all identical cases is the only solution to this issue.

FTO has directed the FBR to reprimand the concerned officers of RTO, Quetta, and MTO, Karachi for not attending the hearing. In this complaint, FBR needs to take a pragmatic view, the order said.

The FTO has asked FBR to direct IR Policy Wing to decide the issue of jurisdiction in line with other identical cases and in the light of orders by the superior judiciary and review individual facts of the instant case, so as to reach a legal and equitable decision.

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