Finance Minister Shaukat Tarin has said that in order to end harassment of the business community by the Federal Board of Revenue (FBR), the finance bill tabled in parliament for financial year 21-22 has stripped the Inland Revenue officers of their powers to arrest people.

The minister said that the IR officers will no longer be able to arrest people over assets concealment or tax defaults. He announced that a three-member committee headed by himself will be in charge of issuing the warrants for arrest in such cases. Other members of this committee will be the FBR chairperson and PM’s aide Waqar Masood.

FM Tarin said the decision was taken to put an end to the harassment meted out to the business community by the FBR. He said the government will opt for third-party audits of the tax defaulters, adding that a list of 7.5million defaulters has been prepared and an action will be taken accordingly.

The FM also talked about the circular debt. He said there will be no increase in the circular debt in FY21-22, adding that currently the circular debt has reached Rs23 billion.


The statement of the minister about the power of arrest came amid calls against Section 203A of the finance bill. In a statement, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Nasser Hyatt Maggo slammed the Section 203A that gives powers to arrest and prosecute any person for concealment of income to assistant commissioners of Inland Revenue Service merely on the basis of an accusation or doubt. 

He said that the income tax is a civil liability and could not be treated as criminal liability, and this has always remained a civil matter historically. The Section 203A opens doors to harassment of business, industry and trade community, he added.

The FPCCI president said that Section 203A will add to the already existing harassment of businessmen by tax officials through issuance of several thousand notices of which Finance Minister Shaukat Tarin has taken notice and his timely intervention has resulted in withdrawal of a big number of notices issued to the businessmen.

Mian Nasser said that businessmen must be respected for generating taxes and employment for the country. The business should be conducted in harmony instead of conflicts and contradictions created by the tax officials by giving them discretionary powers, he continued.

He said that the Section 192A (Prosecution for Concealment of Income) of the Income Tax Ordinance, 2001, already covers the subject sufficiently. There is no need of Section 203A and the FPCCI demands it should be omitted and taken off the table in the final budget documents.


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