Tax

In a third-world country, ordinarily, governmental agencies tend to abuse powers and tax departments of Pakistan (federal, provincial, or city/district governments) are no exception. Ordinarily, on receipt of a notice (informative and inquisitorial) an ordinary taxpayer of Pakistan, according to my 16 years of experience as a tax lawyer, is driven by three reactions. First, a reaction of fear. Second, a reaction of aversion, and third, a reaction of misunderstanding. In their approach, these reactions are negative, evasive, and reactive in character and instead of resolution of the issue there is a likelihood of exploitation or an expedient conclusion which might prove self-defeating in short or medium terms for lawful tax compliance. On the contrary, a prudent taxpayer and a right-conscious citizen would react to such notice with three positive approaches. He would examine whether the notice has been issued by the exercise of excessive powers beyond the prescribed conditions and limitations cast upon the tax machinery. Whether the notice overstepped the tax rights guaranteed by the statute? Whether the notice created liabilities without fulfilling the prescribed collateral preconditions in terms of protecting the statutory and fundamental rights of a taxpayer. As a tax litigation expert, I would like to advise that the pain, confusion, and disillusionment of fear, aversion, and misunderstanding can be avoided by asking your tax advisers to come out with a solution with respect to your rights, liabilities, and limitations, which are always there, on the exercise of powers by the tax authorities. This is the essence of tax justice and access to complete justice is a fundamental right of every taxpayer/citizen.