The President has upheld the Federal Tax Ombudsman’s position that taxpayers’ confidential financial information cannot be disclosed merely because it is relevant to the assessment of another taxpayer. The matter arose where information from wealth statements, income tax returns and financial transactions of certain taxpayers was reproduced in assessment orders relating to their family members.
While tax authorities may examine information concerning associates or related parties where it is relevant for assessment purposes, the key distinction is between using such information internally and disclosing it through another taxpayer’s assessment order. The FTO observed that Section 216 of the Income Tax Ordinance, 2001 protects taxpayers’ confidential information from disclosure to persons who are not legally entitled to receive it.
The decision reinforces an important compliance principle: tax authorities may use interconnected financial information for legitimate official purposes, but taxpayer confidentiality must still be preserved. Relevant information can remain part of the departmental, appellate or judicial record without being unnecessarily reproduced in documents accessible to another taxpayer.
Here are three different tax-related developments from the same document, focusing on enforcement, dispute resolution and property taxation.