The Anti Corruption Commission (ACC) is going to have access to income tax returns, bankers' books and other documents submitted to the revenue authority so that it can investigate corruption.
The Commission has initiated amending the ACC rules by incorporating an enabling provision in this regard. The provision of the rules will supersede all other existing statutes, including income tax law.
Under the amended provision, now awaiting the Law Ministry's vetting, bankers' books (defined in Bankers Books Evidence Act, 1891) or income tax returns, accounts details, documents containing evidence, tax assessment files will be accessible to an investigating officer of the semi-independent anti-graft watchdog.
Meanwhile, the move to amend the law has stoked concern among chamber bodies and tax experts.
They said such wholesale access to the confidential information may create panic among the taxpayers.
Under Section 168 of the income tax ordinance, 984, taxmen are bound to keep the privacy of the information taxpayers provide to themselves.
Income tax officials said statements, returns, etc of the taxpayers are considered highly confidential documents, which are not accessible to any entities.
Almost all countries, including India, Pakistan, Japan, the USA, the UK, Canada, Australia, and New Zealand have the legal provision to protect taxpayers' information.
In line with international best practices, income tax law has incorporated the provision to keep taxpayers' information confidential since 1922.
The access to tax returns to the other agencies is feared to erode the confidence of the taxpayers, affect revenue collection and investments.
But ACC director general (Legal & Prosecution) Moyeedul Islam differed with the confidentiality slant while talking with the FE on Saturday.
He said there should be no confidentiality of information with regard to investigating corruption.
Currently, he said, ACC investigation officers face difficulties in getting the disclosure of taxpayers' information
from the tax authorities and the central bank.
It would be mandatory for them to disclose the required information after amending the rules, he added.
Chairman of Taxation and Corporate Laws Committee of the ICAB Md Humayun Kabir said the move to amend the ACC rules highlights the mistrust between the two government agencies.
"ACC can investigate anything seeking specific information from the tax authority. Amendment to this rule at this stage may erode the confidence of investors when revenue mobilisation is an utmost priority," he said.
He suggested adequate consultation with the stakeholders before amending the rules as it involves taxpayers' interest.
"We want an effective ACC. To make this happen, cooperation between the NBR and ACC is needed rather than legal amendments," he said.
So far, no investigation of ACC was hampered due to the absence of taxpayers' or central bank's revealing information, he said.
Chairman of the Metropolitan Chamber of Commerce and Industry (MCCI) taxation subcommittee Adeeb H Khan questioned the preparedness of the authority for preventing misuse of taxpayers' information.
"It is necessary to get access to all the required information to conduct comprehensive investigation, but there is a chance of misuse of information in the current environment," he said.
He expressed concern over the capacity of the ACC officials in dealing with the taxpayers' information involving technicalities.
"Trained and expert tax officials understand the context and perspective of the taxpayers' disclosed information, which is difficult for general investigators to understand," he said.
A senior tax official, preferring anonymity, said without amending the rules, the ACC is able to conduct any investigation taking the certified copy of tax returns from the taxpayers and verify the authenticity of the copy from income tax office.
For the prosecution purpose, ACC officials are empowered to confiscate the tax file as per income tax ordinance-1984, section 163 (3) (A).
"Both ACC and NBR are currently working together in national interest," he said.
Last week, the Commission, NBR and the Law Ministry held a meeting to discuss the issue.
The ACC official said both parties reached a consensus over amending the ACC rules.
Tax lawyer Mohammad Hafez Ali feared misuse of taxpayers' information.
He said the Central Intelligence Cell (CIC) of the NBR is investigating tax-related corruption now, so it is not necessary to empower another agency for a similar purpose.
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