In a bid to improve tax collection, the incumbent government might bring in an ordinance enabling the Federal Board of Revenue (FBR) to share taxpayers’ data with the National Database and Registration Authority (NADRA).
The move, which will affect the data of the existing three million taxpayers, may end up severely compromise the privacy of the people, Express Tribune reported on Thursday.
The news report quoted sources in NADRA as saying that the FBR and NADRA were collaborating to bring in the legal amendment to the Income Tax Ordinance. The amendment concerns a clause that bars the FBR from sharing information of income tax return filers with a third party.
The amendment has reportedly already been drafted, whereby Section 216(3) of the Income Tax Ordinance will be changed to allow sharing of the income tax statement and wealth statement of taxpayers with NADRA.
This is the second time in the recent past that the government has tried enabling sharing of taxpayers’ data with a third party. Before the approval of the FY2021-2022 budget as well, the National Accountability Bureau (NAB) had asked the government to give it access to local and offshore tax records, by introducing new legal amendments.
NADRA Chairman spoke to media regarding the matter at hand now and said, “The Artificial Intelligence engine will determine tax liabilities based on data of registered and unregistered persons and standard deviations would be minimum only when filers and non-filers data is available for analysis.”
He also said that after the exercise is complete, the data will also be expunged from NADRA’s system.
The news report said that, back in 2019, the FBR had already discreetly handed over the tax record of income tax return filers for the period 2014 to 2018 to NADRA, and the FBR had also already handed over withholding tax statements of unregistered persons to NADRA. However, they said that now the FBR is reluctant to do it again, and therefore, the law needs to be amended now.
FBR Spokesman, Syed Nadeem Rizvi, speaking on the matter, said that in 2019 information was shared under clause kb of Section 216(3) of the Income Tax Ordinance. That clause allows for sharing non-registered persons’ tax records but it does not allow for sharing the income tax return filers’ data, so now the FBR cannot share the data NADRA is demanding.
He also said that NADRA did not share any outcome of the data that the FBR provided to it in 2019. He also denied working with NADRA at the moment for any upcoming ordinance.