FBR has planned major changes in tax laws to prosecute high-net-worth individuals (non-filers) and initiate criminal proceedings against tax evaders in cases where the tax evasion exceeds Rs. 10 million, reports a local newspaper.
The sources quoted by the report said that the proposal is part of a plan of the Federal Board of Revenue (FBR) to start the process of disposal of tax litigation for cases with total revenue of approximately Rs. 1.2 trillion.
This requires major changes in federal tax laws – the Sales Tax Act, the Income Tax Ordinance, Federal Excise Act and the Customs Act – for speedy prosecution, said the report.
The government is planning to make it mandatory for tax officials of the Federal Board of Revenue (FBR) to file criminal proceedings against taxpayers in cases where the quantum of tax evasion exceeds Rs. 10 million. The unregistered potential taxpayers (non-filers) with the high net worth will be prosecuted through necessary amendments in the Income Tax Ordinance 2001 for the speedy recovery of unpaid taxes from the elite class.
The report quoted a senior tax official saying that section 37A of the Sales Tax Act deals with the powers to arrest and prosecute in cases of tax fraud. However, there is no fixed limit of Rs. 10 million to file a criminal case against the tax evader. After the proposed amendments in the tax laws, mandatory criminal proceedings will be done in cases whenever tax evasion exceeds Rs. 10 million.
For the release of revenue of Rs. 1.2 trillion, expeditious disposal of tax litigations cases needs to be ensured through an amendment in tax laws and capacity enhancement of FBR’s Legal Wing.
Sources said that the Ministry of Law and Justice, in consultation with FBR, will formulate necessary proposals for ensuring the fast disposal of tax litigation cases.
A review of tax enforcement laws will be undertaken by the Ministry of Law in consultation with FBR for proposing penalties and punishments for tax evasion and non-compliance.