FTO Initiates Own Motion Investigation into Tax Affairs of Private Medical College --- Federal Tax Ombudsman
In a significant development, the Federal Tax Ombudsman (FTO) Secretariat has commenced an Own Motion Investigation into the tax affairs of Al-Nafees Medical College, Islamabad. This action stems from the initiation of a comprehensive inquiry prompted by various news reports and social media coverage regarding alleged irregularities in the tax compliance of private medical colleges across Pakistan.
The investigation, initiated under OM No.0085/OM/2023, was prompted by concerns raised regarding the tax matters of Al-Nafees Medical College, which operates under the auspices of Isra University, Hyderabad. Pursuant to Section 10(4) of the FTO Ordinance, in conjunction with Section 9(1) of the Federal Ombudsmen Institutional Reforms Act, 2013, the Secretary and Chief Commissioner-IR, Regional Tax Office (RTO) Hyderabad, were called upon to provide their comments on the matter.
During the proceedings, the Departmental Representative (DR) presented detailed comments, shedding light on the tax-related intricacies of the case. Furthermore, a hearing notice was duly issued to the concerned parties for compliance, ensuring transparency and due process.
The background of the Own Motion Investigation reveals a broader concern regarding tax compliance within the private medical education sector. With approximately 75 PMDC-approved medical colleges and 43 dental colleges operating in Pakistan, issues related to tax evasion, improper withholding tax practices, and non-compliance with regulatory requirements have garnered substantial attention. Reports published in various national and medical-related publications, including the 'Business Recorder,' have highlighted these concerns, emphasizing the need for rigorous oversight and enforcement measures.
The findings of the investigation underscore systemic lapses in tax monitoring and enforcement. Glaring instances of departmental ineptitude and non-compliance have been identified, including the failure to file audited accounts and inadequate withholding tax audits. The investigation further reveals discrepancies in the tax status of Al-Nafees Medical College and raises questions about the transparency of its financial operations.
In light of these findings, the FTO has issued recommendations aimed at strengthening tax compliance and accountability. Key recommendations include the enforcement of filing obligations for audited accounts and withholding statements, as well as the requisition and analysis of employee data to ensure proper tax deductions and compliance with regulatory requirements.
Moving forward, the FBR has been directed to oversee the implementation of these recommendations, with a deadline for compliance set at 90 days. This decisive action underscores the commitment to upholding tax integrity and transparency within the private medical education sector, safeguarding the interests of stakeholders and ensuring equitable taxation practices.
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