As per the Ombudsman Act, the tax ombudsman has been given power to recommend actions against wrongdoers, but he has no authority to punish them unlike the neighbouring country, the MCCI said in the editorial of its latest publication Tax News.

The chamber pointed out that since inception in 2005, the tax ombudsman received only 10 complaints, out of which five were disposed of. The remaining five cases consist of two anonymous petitions and three petitions relating to VAT evasion. These cases were beyond the jurisdiction of the tax ombudsman and hence those have been redirected to the VAT authorities concerned.

According to the MCCI, it will be advisable to start reviewing the reasons, without any further delay, as to why the tax ombudsman's office has not been able to win the public confidence it envisaged at the time of its creation.

"In our view, the functions and authority of the Tax Ombudsman's office should be widened," the chamber said.

It said appropriate amendment should be made in the existing law so that ombudsman is entitled to order punishment for the wrongdoers.

Besides, in order to make the office of Tax Ombudsman more meaningful, the limitation in the Tax Ombudsman Act should be removed as because the tax authorities deliberately avoid passing an order which may result in refund or in issuing refund warrants or giving effect to appeal decisions and the assessees with a fear of antagonising the authorities keep waiting for redress. "The aforesaid limitation bars the assessees from filing complaint to the Tax Ombudsman. In all fairness, assessees should have the right to file complaint on all pending issues without any limitation," the MCCI suggested.

Since the tax ombudsman in the country does not have sufficient workload to justify its existence, the Indian procedure of appeal in between Tribunal and the Supreme Court can be adopted in the country considering a comparatively cheaper cost of litigation than that of the High Court, according to the chamber. "Otherwise, Tax Ombudsman will remain limited to petty and sundry complaints of the tax payers," it continued.

The MCCI suggested strengthening and empowering the tax ombudsman for performing larger functions. "Like the Indian National Tribunal headed by a retired judge of the Supreme Court or the Chief Justice of the High Court as an intermediate body between the Taxes Appellate Tribunal and the Supreme Court, our Tax Ombudsman may be conferred with the power of High Court division with the provision that the appellant may go for 3rd appeal either before the tax ombudsman or the High Court, and with regard to this there is no lacking in the status of Tax Ombudsman because under article 11 of Tax Ombudsman Act, 2005, the status of the judge of a High Court division of the Supreme Court of Bangladesh has been given to the Tax Ombudsman."

Pointing out that a question may arise that the institution of Tax Ombudsman having been adopted in Bangladesh following Pakistan's example, the MCCI said, "Pakistan is a larger country where the network of Tax Ombudsman is spread over all provincial headquarters through regional offices of Tax Ombudsman and because of numerical strength in the enrolment of larger number of tax payers with diversity of problems than ours, Pakistan is in a better position. Besides, the treatment of Ombudsman's recommendations in Pakistan is more improved than ours."

In the conclusion, the MCCI said, "It is high time that our tax ombudsman is empowered with the powers of High Court division to adjudicate revenue disputes between the revenue office and the tax payers as detailed above leaving the option for the appellant either to go to tax ombudsman or to the High Court division keeping in mind the relatively cheaper cost factors. This will also lessen piling up of reference cases on "law points" before the High Court and the appellants will get quick disposal of appeal cases at this stage as substitute for lengthy High Court procedures under rejuvenated tax ombudsman's system with its empowerment with revenue dispute adjudication functions on proper judicial footing."