FBR's new amendments to income tax rules, compensation proposals for dispute resolution

The Federal Board of Revenue has issued a draft of proposed amendments proposing further changes to the Income Tax Rules 2002. The new proposals also include rules regarding the procedure for alternative dispute resolution.

According to the proposed rules, an application for alternative dispute resolution of a tax dispute must be submitted to the FBR in the prescribed form. The application must be accompanied by the details of the taxpayer’s nominated representative and the names of three retired judges for alternative dispute resolution.

The draft proposes to pay Rs 3 lakh to the chairperson of the committee for disputed taxes up to Rs 50 million and Rs 1.5 lakh to each member. In case of a dispute exceeding Rs 50 million, a compensation of Rs 5 lakh to the chairperson and Rs 2.5 lakh to each member has been proposed.

The draft also proposes to give the chairperson and committee members equal travelling and daily allowances to the officers of BPS 22 and BPS 21.

Under the proposed amendments, several cases of the same nature can be combined and processed jointly. If the committee is dissolved, it has been proposed to return the amount already collected or paid within 15 days.

The draft also contains a condition regarding conflict of interest. If any member or chairperson of the committee faces a conflict of interest, he or she must inform the FBR within seven days. After the compensation is issued or paid, the member or chairperson will not be able to detach himself or herself from the proceedings until the final decision is taken.

The FBR has invited objections and suggestions from the public and relevant circles on the proposed amendments, which can be submitted within seven days.