The Federal Board of Revenue (FBR)’s whistleblower or informer can receive upto 20% of the tax evaded money, as much as Rs. 5 million in cash rewards for the detection of tax evasion.

Recently FBR has framed the Inland Revenue Reward Rules 2021, whereby an informer/ whistleblower is entitled to a reward at the rate of 20 percent up to a maximum of Rs 5 million of the tax to be evaded in a single case. This is an incentive for a person who desires to highlight any Tax evasion before the FBR authorities.

Definition of the informer or whistleblower as per these rules means any person who not being an employee of the Federal Board of Revenue. The informer / whistle blower is required to gets himself / herself registered for the purposes of being an informer and “provides information in the shape of a concrete evidence, which conclusively leads to detection of tax evasion, formulation of assessment/reassessment, and eventual recovery of the evaded taxes.”

The amount of reward for an officer/member of staff detecting the tax evasion is lesser of 20pc of the tax sought to be evaded or two years salary as at the time of detection/filing of the detection report.

Whereas, the officer / member of staff completing the adjudication / assessment are entitled to reward a lesser of 20pc of the tax sought to be evaded or two years salary as at the time of its completion of adjudication / assessment.

In case there are more than one claimants of reward on account of detection for assessment, the reward would be apportioned as per the recommendation of the Chief Commissioner or Director General concerned.

If no appeal/revision has been filed against the assessment, the whole of the admissible reward shall be paid immediately after expiry of limitation for filing of appeal/revision.

In case an appeal has been filed against the assessment order the admissible reward claim would be processed as follows: 50pc upon confirmation at 1st appeal forum and 50pc upon completion of appellate process on point of fact i.e. Appellate Tribunal Inland Revenue (ATIR).

As per the rules, the reward will be paid only if the tax sought so to be avoided has been recovered at least to the extent of 50pc of the tax sought to be evaded.

In case detection and assessment have been made by the same officer, he shall be entitled to a reward of the lesser of 20pc of the tax sought to be evaded or 3 years salary at the time of detection/filing of the detection report.