The Federal Board of Revenue (FBR) has established 145 District Tax Offices as part of restructuring measures, with the goal of bringing 1.5 to 2 million new taxpayers into the tax net by June 2024.
FBR Decision For Non-Filers
To achieve this goal, the FBR has decided to disconnect non-filers’ electricity and gas connections, as well as block their mobile SIM cards.
Under Section 114B of the Income Tax Ordinance 2001, the tax watchdog has begun issuing notices to non-filers.
During recent meetings, the Prime Minister has also emphasized the importance of revenue and increasing the number of tax filers.
Opening of District Tax Offices
The FBR announced the opening of these offices as part of a new initiative aimed at broadening the tax base and, ultimately, raising the tax-to-GDP ratio to a desired level.
These offices would be led by District Tax Officers tasked with enforcing Income Tax Returns from non-filers and stop filers.
However, the establishment of these offices marks the beginning of a new chapter in which the tax net will be expanded to fill a critical tax gap on the path to bringing all potential taxpayers into the tax net.
In BS-17/18, these new offices would be led by dedicated Inland Revenue Officers who would obtain and use third-party data obtained from multiple departments and agencies.
Furthermore, departments that hold critical information about asset investments and large expenditures by potential taxpayers who have managed to avoid the taxation system, including registration and filing of tax returns.
Moreover, the federal government is committed to using all available measures and assisting the FBR.
New Documentation Law Introduced
A new Documentation Law is also being introduced, which will require various agencies and departments to provide data to the Federal Board of Revenue via an automated common transmission system.
The National Database and Registration Authority (NADRA) has also been approached for collaboration and assistance.
NADRA Chairman has assured the Federal Board of Revenue of NADRA’s assistance in broadening the tax base through data integration.
The initiative will not only strengthen the FBR’s capacity to enforce tax laws, but it will also make it easier for taxpayers to file tax returns by opening dedicated offices.
To read our blog on “FBR imposes 15% income tax on prepaid phone cards,” click here.