Scrutiny of bank accounts

Published February 28, 2014
- File Photo
- File Photo

Non-corporate business is up in arms against a government decision to give tax collectors the power to peep into the bank accounts of those who they believe are not paying taxes. The businessmen argue that the powers will be misused by the FBR to coerce depositors into bribing it and lead to the flight of capital from the country. Government assurances that honest taxpayers have nothing to fear have not dispelled these suspicions. Even the government’s pledge that those availing themselves of the Prime Minister’s Tax Incentive Package (effective from Jan 1, 2014 until June 30, 2016) will escape scrutiny of their bank accounts has not worked. Most trade and business bodies in the country had already voiced their opposition to this measure announced in the budget for this year. The apex trade body, FPCCI, on Wednesday again called upon the prime minister to at least delay the implementation of the decision until the next financial year if it is not repealed immediately.

It is not as if only non-corporate business is opposing the new powers of the tax collectors. However, the corporate sector has less to fear on this account. Still, even those who don’t expect to experience an FBR crackdown — the chances of such an eventuality remain slim — are not comfortable with the enhanced power of the tax collectors without proper checks in place. The banks are also unhappy because it will force them to spy on their customers — a breach of trust — inducing many to convert their accounts into gold or dollars. Given the massive scale of tax evasion by businessmen, especially traders, the government has a strong case for giving the FBR unusual powers. But if the government must give itself the right to scrutinise bank accounts, a system of checks and balances must also be in place to avoid the possible misuse of such powers. The mismatch between the lifestyle maintained by a person and the amount of tax paid by him, for example, should say a lot about his income and be enough for tax collectors to be alerted to possible evasion. Probing bank accounts should be permitted only in cases where serious suspicions of tax evasion against a person cannot be established through other methods.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Kurram atrocity
Updated 22 Nov, 2024

Kurram atrocity

It would be a monumental mistake for the state to continue ignoring the violence in Kurram.
Persistent grip
22 Nov, 2024

Persistent grip

An audit of polio funds at federal and provincial levels is sorely needed, with obstacles hindering eradication efforts targeted.
Green transport
22 Nov, 2024

Green transport

THE government has taken a commendable step by announcing a New Energy Vehicle policy aiming to ensure that by 2030,...
Military option
Updated 21 Nov, 2024

Military option

While restoring peace is essential, addressing Balochistan’s socioeconomic deprivation is equally important.
HIV/AIDS disaster
21 Nov, 2024

HIV/AIDS disaster

A TORTUROUS sense of déjà vu is attached to the latest health fiasco at Multan’s Nishtar Hospital. The largest...
Dubious pardon
21 Nov, 2024

Dubious pardon

IT is disturbing how a crime as grave as custodial death has culminated in an out-of-court ‘settlement’. The...