The culture of legal regulation has become deeply ingrained in the country`s tax administration over time, because the legislative powers delegated by parliament – through laws – to the tax authorities have been excessively abused. By definition, the use of SROs should be limited to establishing rules and procedures for the implementation of one or more tax laws. Or it can be used to eliminate “hard cases” and ambiguities – without new levies, exemptions, concessions, exemptions, etc. – that taxpayers may encounter when applying one or more laws passed by the legislature. However, in the Pakistani context, RBF was also given the legal authority to grant unlimited tax benefits, tax exemptions, and exemptions without parliamentary approval. For this reason, experts consider the excessive abuse of delegated legislative powers in favour of powerful interest groups to the detriment of honest taxpayers as the cause of our tax problems. The practice of granting massive financial favours in the name of tax exemptions, concessions and tax exemptions is not limited to one government or another. For example, while the previous government gave Rs 1 billion to various powerful lobbies through SROs in five years, the incumbent leaders have already spent Rs 104 billion in the first half of the current budget, according to a report published in this newspaper. To stop SRO abuses, the IMF persuaded the government to withdraw tax exemptions of 350 billion rupees over three years in exchange for a bailout. However, it is surprising that the government continues to offer tax relief, despite its intention to remove some tax exemptions in its next budget. RBF officials say the board`s advice to grant exemptions and concessions is ordered by political authorities. While this is largely true, in many cases the Commission has exceeded the legislative powers delegated to it at its discretion.
The practice of supporting favourites through SROs cannot be eliminated without significantly reducing the tax officer`s power to set rules and eliminate taxpayers` “difficulties” through notifications. The power to grant tax exemptions, concessions and exemptions should rest entirely with Parliament, as the Supreme Court has held several times in the past.