Photo: Prashantnepayments

In its regular weekly meeting on September 13, the cabinet approved the draft of Tax Ombudsman (Abolition) Bill-2010 to scrap the Tax Ombudsman Act (TOA), 2005. The office of the tax ombudsman will stand abolished if the bill is passed in the Parliament.
Finance Minister A.M.A. Muhith had disclosed earlier that the government would abolish the tax ombudsman office. He made the disclosure to reporters on July 8 when they drew his attention to the future appointment of a new tax ombudsman as the four-year tenure of Khairuzzaman Chowdhury, the country's first tax ombudsman, expired the same day.
The immediate past BNP-led government established the office of tax ombudsman with the intention of giving relief to tax payers in tax-related malpractice and injustice by tax officials. In his budget speech for the FY 2006-2007, the then finance minister M. Saifur Rahman said: "Tax Ombudsman Act, 2005 has been enacted in the Parliament to ensure transparency in tax administration and accountability."
As per the TOA-2005, the functions and responsibilities of the tax ombudsman include, inter alia, making investigation into a complaint made by an aggrieved person against the misdeeds of tax officials in matters relating to assessment of income tax or customs duty, classification of commodities or valuation thereof, or on the basis of reference from the president, prime minister, finance minister, parliament, or on the order of the Supreme Court. He may also institute suo moto inquiry against the NBR or any of its officials for any misdeeds.
If, after investigating a complaint, the tax ombudsman is of the opinion that injustice has been done to the complainant, he will send his written recommendation(s) to the NBR, which has to implement the recommendation(s) within 60 days from the date of receipt of such recommendation(s) and inform the tax ombudsman.
If the NBR is unable to implement the recommendation(s), it will inform the tax ombudsman the reason(s) for non-implementation of the recommendation(s). The tax ombudsman will then bring such cases to the notice of the finance minister who may (i) direct the NBR to implement tax ombudsman's recommendation(s); (ii) request the tax ombudsman to reconsider his recommendation(s); (iii) take such actions as he deems fit.
The only reason cited by the government for the abolition of the office of the tax ombudsman is that some of the provisions of the TOA contradict a number of tax-related rules and laws. In other words, existing income tax, customs and value added tax laws do not have any provision to implement tax ombudsman's recommendations. The government wants to go back to old ways of addressing the taxpayers' grievances or devise alternative systems, if necessary.
Many concerned quarters have questioned the cabinet decision of abolishing the tax ombudsman's office on the lone argument that some of the provisions of the TOA are in conflict with a number of tax-related rules and laws. Their arguments and views may be summarised as follows:
-Instead of scrapping the TOA, the government should have gone for amending it or the relevant tax laws to remove the contradictions, if there is any;
-The tax ombudsman's office was created because the traditional way of addressing taxpayers' grievances had not been working. This is evident from the pending of thousands of unresolved tax-related cases with appellate tribunals and higher courts;
-The office of the tax ombudsman works as an intermediary between the taxpayers and the tax department. The aggrieved taxpayers may find relief from the harassment of the tax officials without going to tax appellate tribunals or to higher courts, which is a costly affair;
-There are tax ombudsmen in Pakistan, India (at state level) Australia, Thailand, the Philippines and some other countries. In many countries, there are offices which perform functions which are more or less similar to those performed by the tax ombudsmen in the countries mentioned above but bear different names.

When contacted, Khairuzzaman Chowdhury, who recently finished his tenure as the country's first tax ombudsman, said that as per law he had taken cognisance of 1,000 plus complaints during his tenure although the number of complaints was a few thousands. He recommended remedial measures against 700 of them, and the NBR implemented all of them.
According to him, weak laws were the major obstacles to the tax ombudsman's office playing an effective role in checking corruption by the tax officials. He also said that scrapping the office of the tax ombudsman was not a solution; rather it should be strengthened further. In this connection he referred to the recommendation of the parliamentary committee on the finance ministry, which, not long ago, had recommended strengthening of the office of the tax ombudsman.
An online poll by The Daily Star shows that 74.3% have not supported the cabinet decision of abolishing the office of tax ombudsman. An English-language daily (Financial Express of September 15) wrote: "It is natural on the part of the taxmen to disapprove of the existence of tax ombudsman's office. Regulators or oversight bodies are essential to ensure accountability and transparency. But most institutions, may it be a bank or a revenue collection agency, are not otherwise inclined to accept the role or authority of regulators or oversight bodies."
It is true that the performance of the tax ombudsman's office, on the whole, had not been up to the expectation. This may largely be attributed to the lack of awareness among the general taxpayers about seeking redress from the tax ombudsman against harassment by tax officials, and the big taxpayers' fear of more harassment by the taxmen for filing complaints with the tax ombudsman.
Launching vigorous awareness programmes to make the tax ombudsman system more familiar to the taxpayers is the need of the hour. We would not have needed a tax ombudsman had the tax administration been reformed to make the tax payment hassle-free.
It is uncertain how many years will be needed to get the tax administration right. Therefore, abolition of the office of the tax ombudsman, which is independent of the NBR, without an alternative redress mechanism may not be a pro-people decision. The government should give a second thought to the matter.

M. Abdul Latif Mondal, is a former Secretary.