Finance Ministry thwarts FBR officials bid to take share in taxes 

Federal Finance Minister Ishaq Dar has taken notice of the “Common Pool Fund Rules 2023” notification and directed the FBR to put the implementation of the rules on hold, reported 24NewsHD TV channel.

The move came after the Federal Board of Revenue (FBR) notified new rules on Jan 16 to divert taxes and fees for the distribution of allowances among its officers.

The FBR quietly notified IRS Common Pool Fund Rules 2023 without seeking prior approval from the federal cabinet.

The rules showed that the IRS Common Pool Fund would be fed by up to 90% of the collection of the “Point of Sale (POS) Service fee”. Every citizen pays Re1 on every invoice at the time of shopping – a collection that runs into hundreds of millions of rupees, which was to be used for the personal benefit of taxmen. The Re1 levy had been imposed to raise funds for the technological upgrade of the POS system, which the FBR has tried to install to capture true sales of businesses.

However, the ministry has another story to tell.

In a press release, Ministry of Finance & Revenue clarified that through Finance Act. 2019, Section 76 was inserted in Sales Tax Act 1990 which empowers the Federal Board of Revenue with the approval of the Minister In-charge to impose levy, fee and service charges on Tier-1 retailers @ Re. 1 per invoice.

Subsequently, FBR with the approval of the then Federal Finance Minister levied a POS Service Fee of Re. 1 per invoice on Tier-1 retailers. The purpose of the aforesaid levy was explicit and duly included the welfare of IRS employees. This was notified vide SROS.R.0.1279(1)/2021 dated 30th Sept. 2021.

Under the provisions of section 76 (2) of the Sales Tax Act 1990, FBR is authorized to prescribe the mode and manner to expend such service fee/charges. Thereafter, FBR issued Common Pool Fund Rules for the welfare of its employees on Jan 16, 2023 with the approval of the Board-in-Council.

The heads of expenditure provided in the Rules include financial assistance to families of shuhada, subsidy on marriage expenditure, health insurance, scholarships for education of children, headquarter support allowance, fuel subsidy to the junior officers, IRS officers mess, house rent subsidy, support for widows and burial expenses.

Keeping in view the current economic situation in Pakistan, the Finance Minister directed the FBR to put the implementation of these Rules on hold.