FBR Starts New Plan to Bring Non-Filers into Tax Net, Over One Million Non-Filers Identified

The Federal Board of Revenue (FBR) has started implementation of an enforcement plan to bring one million non-filers and stop filers of income tax returns into the formal tax regime.

Sources told Propakistanti that the FBR is implementing a plan in a systematic and phase-wise manner. Over one million non-filers have been identified besides unregistered persons. If unregistered persons are also included in the data, the FBR will bring nearly 2 million new taxpayers into the tax net till June 2024.

One million are non-filers and stop-filers and another one million would be new taxpayers, who are out of the tax net.

At the same time, the documentation of retailers is also part of the plan to broaden the tax base. Non-filer shopkeepers and retailers would be liable to pay tax on their indicative income, which would be based on the rental value of the properties of their shops, the sources added.

Under the plan, the data of 500,00-600,00 non-filers has been communicated to the field formations to bring them into the tax net. This is an ongoing exercise of documentation.

The FBR is analyzing the withholding tax statements and potential persons who would be forced to file their due income tax returns.

Sources further told ProPakistani that there are persons (non-filers) who have filed returns 4-5 years back for one-time property transactions, or vehicle purchases to qualify for inclusion in the ‘Active Taxpayer List.’ Other individuals filed returns in the past solely to obtain refunds. Notices will be issued to these non-filers, urging them to promptly file their income tax returns.”

The FBR has obtained third-party data from various government departments and unregistered persons would be served notices to disconnect utility connections including electricity and gas connections and block mobile SIMs.

A new Documentation Law is also being introduced to obligate various agencies/departments to provide data to the FBR through an automated common transmission system. Collaboration and assistance from the National Database and Registration Authority (NADRA) have also been sought.

The chairman NADRA has assured the Federal Board of Revenue of its assistance in widening of tax base through Data Integration.

The initiative would not only strengthen FBR’s capacity to enforce tax laws but will also facilitate taxpayers in filing tax returns by establishing dedicated offices.

The FBR has already notified the offices of 145 District Tax Officers, a new establishment that will help broaden the tax base. These offices would be headed by District Tax Officers entrusted with the responsibility of enforcing Income Tax Returns from non-filers and stop filers.

These new offices would be headed by dedicated Inland Revenue Officers in BS-17/18 who would obtain and utilize third-party data acquired from multiple departments and agencies that hold critical information regarding investment in assets and incurring of huge expenditures by potential taxpayers who till now have managed to escape and stay away from the taxation system including registration and filing of tax returns.