Latest news with #CIR
Business Recorder
12 hours ago
- Business
- Business Recorder
Arrests for tax fraud: major changes made in sales tax law thru Finance Bill
ISLAMABAD: The Federal Board of Revenue (FBR) has introduced major changes in sales tax law through Finance Bill 2025 for the arrest of those involved in tax evasion or tax fraud. According to a statement issued by the FBR on Friday, Finance bill is currently being discussed in the National Assembly and among various business circles. An impression has been created that some of the amendments introduced in the Finance Bill are not understood well by the public at large. Arrest for tax fraud: Senate panel for defining a threshold For instance, the legal provisions for the arrest of those involved in a tax fraud have already been provided under Section 37A of the Sales Tax Act, 1990 along with an elaborate procedure to be followed after the arrest which involves intimating the Special Judge immediately and the production of such person before Special Judge within 24 hours. However, the proposed amendment now restricts the powers of the officer to arrest by making prior inquiry after approval of the Commissioner Inland Revenue (CIR). Only on the basis of the findings of the inquiry CIR will authorise the investigation which would give the investigation officer the powers of an officer in charge of a police station under Code of Criminal Procedure, 1898 (Act V of 1898). The arrest can only be made with the prior approval of CIR if the investigation officer has reasons to believe that a tax fraud may have been committed by a person. The FBR further stated that the new legal provision further provides that if the arrest is malafide, the matter will be referred to the Chief Commissioner for fact finding inquiry. This shows that in contrast to the earlier provision where an Assistant CIR could arrest an offender, the new provisions bring transparency in the process by a mandatory prior inquiry and investigation and finally permission by the CIR. Moreover, certain changes and amendments are also necessary to reassure the compliant taxpayers that those evading taxes or involved in tax fraud are dealt with by the state with an iron hand. FBR Chairman Rashid Mahmood Langrial has expressed his willingness to discuss the recent changes made in the tax laws and introduce changes wherever needed, for example, the provisions related to arrest could be revised to mandate the permission of multiple senior officers before any arrest. Furthermore, in order to ensure that these powers are not misused by the authorised tax officers against the compliant taxpayers and business community, Prime Minister Shehbaz Sharif has formed a high-powered committee, which will be headed by Minister for Finance and Revenue, to re-evaluate the proposed amendments and suggest adequate safeguards to prevent potential misuse of powers. The other members of the Committee will include Ministers of Law and Economic Affairs Division, Minister of State for Finance, SAPM Industries and Chairman FBR. The Committee will also examine various options to ensure that legal economic activities are not stifled and propose additional protective measures against unlawful use of authority. The Committee will submit its recommendations to Prime Minister in three days. FBR is committed to safeguard the legal rights of the compliant taxpayers and to increase the tax collection and state revenues by discouraging non-compliant taxpayers and acknowledging those who are paying their due share to the state, FBR added. Copyright Business Recorder, 2025
Business Recorder
14 hours ago
- Business
- Business Recorder
Arrests for tax fraud: Major changes made in ST law thru finance bill
ISLAMABAD: The Federal Board of Revenue (FBR) has introduced major changes in sales tax law through Finance Bill (2025-26) for the arrest of those involved in tax evasion or tax fraud. According to a statement issued by the FBR on Friday, Finance bill is currently being discussed in the National Assembly and among various business circles. An impression has been created that some of the amendments introduced in the finance bill are not understood well by the public at large. Arrest for tax fraud: Senate panel for defining a threshold For instance, the legal provisions for the arrest of those involved in a tax fraud have already been provided under Section 37A of the Sales Tax Act, 1990 along with an elaborate procedure to be followed after the arrest which involves intimating the Special Judge immediately and the production of such person before Special Judge within 24 hours. However, the proposed amendment now restricts the powers of the officer to arrest by making prior inquiry after approval of the Commissioner Inland Revenue (CIR). Only on the basis of the findings of the inquiry CIR will authorise the investigation which would give the investigation officer the powers of an officer in charge of a police station under Code of Criminal Procedure, 1898 (Act V of 1898). The arrest can only be made with the prior approval of CIR if the investigation officer has reasons to believe that a tax fraud may have been committed by a person. The FBR further stated that the new legal provision further provides that if the arrest is malafide, the matter will be referred to the Chief Commissioner for fact finding inquiry. This shows that in contrast to the earlier provision where an Assistant CIR could arrest an offender, the new provisions bring transparency in the process by a mandatory prior inquiry and investigation and finally permission by the CIR. Moreover, certain changes and amendments are also necessary to reassure the compliant taxpayers that those evading taxes or involved in tax fraud are dealt with by the state with an iron hand. FBR Chairman Rashid Mahmood Langrial has expressed his willingness to discuss the recent changes made in the tax laws and introduce changes wherever needed, for example, the provisions related to arrest could be revised to mandate the permission of multiple senior officers before any arrest. Furthermore, in order to ensure that these powers are not misused by the authorised tax officers against the compliant taxpayers and business community, Prime Minister Shehbaz Sharif has formed a high-powered committee, which will be headed by Minister for Finance and Revenue, to re-evaluate the proposed amendments and suggest adequate safeguards to prevent potential misuse of powers. The other members of the Committee will include Ministers of Law and Economic Affairs Division, Minister of State for Finance, SAPM Industries and Chairman FBR. The Committee will also examine various options to ensure that legal economic activities are not stifled and propose additional protective measures against unlawful use of authority. The Committee will submit its recommendations to Prime Minister in three days. FBR is committed to safeguard the legal rights of the compliant taxpayers and to increase the tax collection and state revenues by discouraging non-compliant taxpayers and acknowledging those who are paying their due share to the state, FBR added. Copyright Business Recorder, 2025
Business Recorder
a day ago
- Business
- Business Recorder
Budget FY25-26: Finance bill still being discussed, says FBR
The Federal Board of Revenue (FBR) on Friday said the Finance Bill 2025 was still being discussed in the National Assembly (NA) and among various business circles. The FBR's statement comes as 'a number of news stories in the digital and print media give the impression that some of the amendments introduced in the finance bill are not understood well by the public at large', the tax body said. 'For instance, the legal provisions for the arrest of those involved in a tax fraud have already been provided under Section 37A of the Sales Tax Act, 1990 along with an elaborate procedure to be followed after the arrest which involves intimating the Special Judge immediately and the production of such person before Special Judge within 24 hours. 'However, the proposed amendment now restricts the powers of the officer to arrest by making prior inquiry after approval of the Commissioner Inland Revenue (CIR). Only on the basis of the findings of the inquiry CIR will authorise the investigation which would give the investigation officer the powers of an officer in charge of a police station under Code of Criminal Procedure, 1898 (Act V of 1898),' the FBR said. Key highlights of Pakistan budget for 2025-26 The arrest could only be made with the prior approval of CIR if the investigation officer had reasons to believe that a tax fraud might have been committed by a person, the statement added. According to the tax body, the new legal provision further provides that if the arrest is mala fide the matter will be referred to the Chief Commissioner for fact finding inquiry. 'This shows that in contrast to the earlier provision where an Assistant CIR could arrest an offender, the new provisions bring transparency in the process by a mandatory prior inquiry and investigation and finally permission by the CIR. 'Moreover, certain changes and amendments are also necessary to reassure the compliant taxpayers that those evading taxes or involved in tax fraud are dealt with by the state with an iron hand.' FBR chairman Rashid Mahmood Langrial has expressed his willingness to discuss the recent changes made in the tax laws and introduce changes wherever needed, for example, the provisions related to arrest could be revised to mandate the permission of multiple senior officers before any arrest. 'Furthermore, in order to ensure that these powers are not misused by the authorised tax officers against the compliant taxpayers and business community, the Honorable Prime Minister Shehbaz Sharif has formed a high powered committee, which will be headed by Minister for Finance and Revenue, to re-evaluate the proposed amendments and suggest adequate safeguards to prevent potential misuse of powers.' Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals 'for a competitive economy' The other members of the committee will include Ministers of Law and Economic Affairs Division, Minister of State for Finance, SAPM Industries and Chairman FBR, as per the statement. 'The committee will also examine various options to ensure that legal economic activities are not stifled and propose additional protective measures against unlawful use of authority. The committee will submit its recommendations to the Honorable Prime Minister in three days.' **
Fashion United
12-06-2025
- Business
- Fashion United
Tax loophole: Decathlon expresses concern over potential CIR decrease in France
As the French government addressed the 2026 budget, the subject of tax credit cuts resurfaced within local media. Among these, a potential decrease in the CIR (Crédit d'Impôt Recherche) could significantly impact companies in the fashion and sports sectors, such as French sporting goods retailer Decathlon. Concerned by the issue, Decathlon voiced its apprehension. According to a document from the Haute Autorité pour la transparence de la vie publique (HATVP) dated March 21, 2025, Decathlon contacted parliamentary decision-makers to warn about the consequences of a reduction in the CIR. The sports retailer indicated this decrease would impact the 'innovation ecosystem in France and the competitiveness of French companies'. Research tax credit What is the CIR? In France, the CIR "aims to encourage companies to engage in research and development (R&D) activities", as stated on the government website This tax system allows companies to deduct part of their R&D expenses from their corporate tax. The CIR rate varies depending on the amount of expenditure incurred. It is 30 percent for expenses less than or equal to 100 million euros and 5 percent for expenses exceeding this amount. The CIR represents substantial financial aid for companies like Decathlon, which have made innovation a pillar of their business model. Innovation has been at the heart of Decathlon's strategy since its creation in 1976. The company distinguishes itself by creating its own brands and developing new products, which it presents each year at an event called 'Reveal Innovation'. The CIR supports this effort by reducing the financial risks associated with the research undertaken. Given Decathlon's continuous investments in R&D, it is highly likely the company is a significant beneficiary of this credit. By warning about the consequences of a decrease in the CIR, the company aims to preserve a favourable tax environment that allows it to continue investing in research into new technologies and materials. Furthermore, Decathlon also mentioned the "innovation ecosystem in France", highlighting the interdependence of economic actors. A decrease in the CIR could weaken the entire innovation value chain, affecting start-ups, SMEs, research laboratories and partnerships. For a group like Decathlon, a dynamic ecosystem is essential for recruiting talent, collaborating with innovative partners and accessing new technologies. This is especially true as the group now owns an investment company called Decathlon Pulse, whose objective is to develop ideas and concepts with 'strong potential'. In 2024, the Decathlon group recorded a 5 percent YoY growth in turnover, reaching 16.2 billion euros. Decathlon x Tawaraya. Credits: Decathlon According to an article published by Le Monde on January 9, 2025, the CIR is the state's primary tax expenditure for businesses, and its amount continues to increase: it was 7.6 billion euros in 2024, approximately 10 percent of corporate tax. According to the same media, the CIR is "a tax loophole that has become a veritable gold mine, abundant, generous and coveted". This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
Business Recorder
20-05-2025
- Business
- Business Recorder
Affected party (taxpayer): Assessment order communication mandatory: ATIR
ISLAMABAD: The Appellate Tribunal Inland Revenue (ATIR) has ruled that the communication of the assessment order to the affected party (taxpayer) is essential for the order to attain legal efficacy within the statutory timeframe. Through an order issued by the ATIR, it stated that an order passed internally on a file, but not communicated to the affected party (taxpayer) within the legally prescribed time limit, cannot be deemed to have been validly passed within that period. Prior to granting any extension in time for passing of amended order under Section 122(5A) of the Income Tax Ordinance, 2001, it is the bounden duty of the Commissioner to act impartially, providing a fair opportunity of hearing to all rival parties. It is reliably learnt that a landmark order has been passed by the ATIR on arguments made by tax lawyer Waheed Shahzad Butt wherein the ATIR held that communication of the order to the affected party is essential for the order to attain legal efficacy within the statutory timeframe. Merely signing or noting it on a file without informing the concerned party fails to meet the legal standard. Shahzad Butt Advocate, who represented the appellant, hailed the decision as a landmark in administrative and tax jurisprudence. He stated, 'This ruling is a critical reaffirmation that authorities must act transparently, within the bounds of the law, and with full regard to the rights of the parties involved. It sets a powerful precedent for future adjudication where procedural fairness is at stake.' ATIR order states 'Notice was issued on 08.01.2024 and the amended order has been passed on 08.11.2024. Resultantly, it has been proved that the order has been passed after a lapse of 305 days from the issuance of show cause notice, while as per statement of the author extension in time was sought from the concerned Commissioner after lapse of 239 days on 03.09.2024. A total period of 240 days has been provided by the legislature to dispose of the show cause notice (SCN)in the shape of assessment order. It is now settled principle of law that prior to granting extension, it is the bounden duty of the CIR to provide an opportunity of hearing to the rival parties and act like a neutral unbiased umpire. However, in the instant case, admittedly no such opportunity has been granted to the appellant, which renders the extension order illegal & void ab-initio. The impugned amended order is thus time barred, ATIR order added. Copyright Business Recorder, 2025
