FBR Empowers NADRA to Use AI for Enhancing Tax Base

The Federal Board of Revenue (FBR) has allowed the National Database and Registration Authority (NADRA) to use modern computational methods to calculate indicative income and tax liability.

FBR issued a circular saying that the government has allowed NADRA to compute indicative income and tax liability on the basis of various expenses, receipts, assets, properties, and liabilities, etc using artificial intelligence, mathematical or statistical modeling, or any modern methods.

Circular No 07 of 2021 shows that a new section 175B has been inserted in the Ordinance.

Sub-section (1) of section 175B mandates the NADRA to share its records or any other information available or held by it, on its own motion or upon application by the Board.

The board may forward such information to the concerned tax authorities having jurisdiction in connection to the subject matter relating to the information, who may utilize the information for the purpose of levy of tax. The indicative income and tax liability shall be communicated to the person to whom it relates.

Such a person shall have the option to pay tax as prescribed. In case of failure to pay such liability within the stipulated timeframe, the tax authority shall take action under the provisions of the Ordinance on the basis of the Indicative income so computed.