FBR to start freezing bank accounts without warning

With FBR rules about issuing a warning to defaulters now revoked, taxmen will now be freezing bank accounts without prior warning. People including tax lawyers and business professionals objected and called it a ruling that damages ease of doing business.

The Federal Board of Revenue ( FBR ), formerly known as Central Board of Revenue. A federal law enforcement agency of Pakistan that investigates tax crimes, suspicious accumulation of wealth and money-laundering
The Federal Board of Revenue ( FBR ), formerly known as Central Board of Revenue. A federal law enforcement agency of Pakistan that investigates tax crimes, suspicious accumulation of wealth and money-laundering

ISLAMABAD, PAKISTAN – On Monday, The Federal Board of Revenue (FBR) made it legal for taxmen to freeze defaulter bank accounts without prior notice. This decision came in after the clause that demands tax officers to notify a person 24 hours before closing their account. While this revocation may bring positive changes into tax revenues for the government, it has met a lot of criticism.

Tax Lawyers and experts in financial industry opposed the revocation and termed it as harassment. People objected and rightly so said that this rule is something that opposes the ease of business.

While a lot of people may find this rule new, however this practice of freezing accounts without a notification is quite old. This ended when Shabbar Zaidi stepped in as the FBR Chairman in 2019. Zaidi came in and drafted a new clause that forced all taxation officials to notify a person before freezing his account. Shabbar Zaidi’s time in FBR came to an end when he resigned in 2020.

Ex Chairman FBR, Shabbar Zaidi showed displeasure while talking about the revocation of the clause he formed. “I am personally sorry to hear the withdrawal of the first instruction issued when I joined as chairman FBR,” said Zaidi.

“There should be no freezing of bank accounts without intimation and approval from chairman FBR. Due to this there was a major relief to taxpayers. I urge the Prime Minister, Finance Minister, and Chairman FBR to reinstate it the withdrawn clause”, he added.

Commerce authorities and the Business community displeased

As soon as this notification by FBR came out, a large portion of tax payers and the business community stood against it. President Karachi Tax Bar Association (KTBA), Muhammad Zeeshan Merchant raised voice for the rights of tax payers. He said that this revocation is a harassment of tax payers. Do taxpayers have any rights? he questioned.

Karachi Chamber of Commerce and Industries (KCCI) also opposed the decision. “This move will only reduce the ease of doing business in the country and certainly shatter the trust and confidence of the business community”, said a KCCI official while showing his disappointment towards the revocation.

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