FBR limits whistleblowing cash reward at Rs5m

• The reward was fixed under the new Inland Revenue Reward Rules 2021, which are applicable from January 1

• According to sources, the FBR wants to keep most of the recovered taxes in the kitty by capping the reward money

• Under the rules, a private person can also be registered with the FBR to provide information on tax evasion

KARACHI: The Federal Board of Revenue (FBR) capped on Friday a cash reward for whistleblowing at a maximum of Rs5million which was previously entitled to 20% of the recovered taxes against a tipoff, The News reported on Saturday.

The reward was fixed under the new Inland Revenue Reward Rules 2021, which are applicable from January 1. 

According to the sources, by capping the reward money, the FBR wants to keep most of the recovered taxes into the kitty. Under the rules, a private person can also be registered with the FBR to provide information on tax evasion.

Read more: FBR serves notices to 832,000 non-filers

“The whistleblower is required to provide information in the shape of concrete evidence, which conclusively leads to detection of tax evasion, formulation of assessment/reassessment and eventual recovery of the evaded taxes,” the FBR said in a statement.

Reward at the completion of assessment

The officers and members of staff completing the adjunction or assessment are also entitled to a lesser of 20% of the tax sought to be evaded or two years’ salary as at the time of completion of the assessment.

“If no appeal is filed against the assessment, the whole of the admissible reward shall be paid immediately after expiry of limitation for filing of appeal/revision,” said the FBR.

“In case an appeal has been filed against the assessment order the admissible reward claims would be processed as 50% upon confirmation at first appeal forum and 50% upon completion of the appellate process on point of fact i.e. Appellate Tribunal Inland Revenue.”

Reducing the reward amount for tax officials, the revenue board, as per the new changes, said that officers and members of staff detecting tax evasion are entitled to a lesser of 20% or two years’ salary as at the time of detection/filing of the detection report.

Terms and conditions

The FBR maintained the reward will be paid only if the tax sought to be evaded has been recovered at least to the extent of 50%.

Read more: FBR decides against imposing penalty on late income tax returns filers

The FBR further said if detection and assessment had been made by the same officer, “he shall be entitled to a reward of the lesser of 20% of the tax sought to be evaded or three years’ salary as at the time of detection/filing of the detection report.”

Under the rules, FBR may give rewards to officers/officials in recognition of the meritorious services at the close of every financial year. 

“The amount of reward for meritorious services in no case will be less than three and more than six salaries in every single case,” the FBR said.