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AOA Fact Sheet

Federal Tax Ombudsman, Pakistan

NOVEMBER 14, 2009 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
Legal tax employees of Federal Board of Revenue (FBR)/Revenue Division,
Framework 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, inefficiency and


ineptitude, in the administration or discharge of duties and
responsibilities;

(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.

The Federal Tax Ombudsman Pakistan has jurisdiction to investigate any


Jurisdiction/ allegation of the maladministration. The FTO Ordinance, the FTO’s
Functions 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

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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.

• 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.
Organizational
Structure 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.

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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 The Revenue Division is required to implement decisions of the Federal


Tax Ombudsman and inform the Office of FTO about the action taken
Arrangements

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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.

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

When the Federal Tax Ombudsman decides to conduct an investigation


under the FTO Ordinance, the following steps are taken:
Investigative
1. Notice is issued to the Revenue Division along with copy of the
Techniques Complaint for written reply usually within 14 days or earlier if the
matter is of an urgent nature.
2. The written reply of the Revenue Division is sent to the Complainant
along with the notice of hearing.
3. 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.
4. 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.
5. The Revenue Division reports compliance within the stipulated time to
the Federal Tax Ombudsman.

PGR(Public
Regulations for Public Grievance Redress are being simplified to make
Grievance these more user- friendly.
Redress) Rules
& Standards

Freedom of Section 19 of the Freedom of Information Ordinance 2002 provides that if


any person is denied access to information related to Revenue Division,
Information
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(FOI)Standards he/she can file a complaint with the Federal Tax Ombudsman to seek such
access.

Use of The Office of Federal Tax Ombudsman is as yet functioning on manual


system. A comprehensive IT plan is underway to transform Office of FTO
Technology 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 seminars and meetings with tax and trade bodies are held frequently
Public for the purpose. The electronic/print media also plays a critical role in
Awareness & advocacy.
Outreach 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 Federal Tax Ombudsman Pakistan is one of the 163 voting members
Linkages with of International Ombudsman Institute (IOI) established with the objective
Civil Society of promoting the concept of Ombudsmanship, encouraging and assisting
research, and developing and operating educational projects and
programmes.
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.

The main institutions functioning parallel to the Office of FTO in


Parallel redressing grievances of the aggrieved are as follows:
Complaint • Parliamentary Committees
• Supreme Court of Pakistan
Redress
• Office of Auditor General of Pakistan
Systems • Prime Minister’s Inspection Commission
• Federal Investigating Agency
• National Accountability Bureau