ISLAMABAD: The federal government began on Tuesday civil proceedings against top 75 tax dodgers and asked them to file income tax returns within two weeks.
Tax experts also advocated criminal proceedings against them provided they ignore tax notices.
In a large swoop to widen the tax net, the Federal Board of Revenue (FBR) started a massive drive for the recovery of taxes from big and influential tax evaders, according to a statement issued by the FBR.
It picked 75 individuals and sent them 185 tax notices as a majority of them received more than one notice due to concealment of income for more than a year.
In the first phase, strict action is being taken against 169 tax evaders and non-filers with proven trail of large business transactions and financial deals in recent times, stated the FBR.
The FBR’s Broadening of Tax Base wing is spearheading the drive against the tax dodgers.
All such tax evaders have been identified by the FBR and are being proceeded against for the recovery of payable tax besides being subjected to heavy fines and penalties for failing to fulfil tax obligations, stated the FBR.
FBR urged to spread awareness about filing tax
These people have been identified by capturing their spending patterns. The FBR said these people have purchased properties of over Rs20 million, 1,800cc or larger engine cars, or have received rent to the tune of Rs10 million or more in a year. They did not bother to file tax returns and were not in the list of taxpayers, said the FBR.
The drive for the recovery of tax from these big tax evaders is being launched across Pakistan without any discrimination, it added.
The FBR has launched an operation against those who are spending a lavish life but are not paying their due taxes, said Federal Minister for Information Fawad Chaudhry.
The minister said those people who availed the last tax amnesty and declared their hidden assets would not be chased by the government.
The FBR has started civil proceedings by serving tax notices on these people under Section 114 (4) and 116 of the Income Tax Ordinance.
It says the commissioner may, by notice in writing, require any person who is required to file a return of income under the section for a tax year or assessment year but who has failed to do so to furnish a return of income for that year.
Section 114 (4) allows the commissioner to ask a non-filer to submit return within 30 days from the date of service of such notice or a longer or shorter period as may be specified in the notice by the commissioner.
In case of non-compliance by these people after receiving tax notices first under Section 114 and then under Section 121, the FBR should in parallel start criminal proceedings against the tax dodgers, said Dr Ikramul Haq, an eminent tax lawyer.
FBR set to identify new taxpayers
Haq said the FBR has the authority to start criminal proceedings under Section 192A that allows courts to impose a fine of up to Rs500,000 or imprisonment of up to two years, or both.
Haq underlined that the FBR should make these top tax dodgers examples for other people.
The FBR faces a gigantic task for broadening its extremely narrow tax base. In the last fiscal year 2017-18 about 1.4 million people filed their income tax returns. But during the statutory deadline of September 30, the FBR received less than 350,000 tax returns this year, forcing it to give two months extension.
The crackdown on the high-value targets has been launched on the instruction of Federal Minister for Finance, Revenue and Economic Affairs Asad Umar as part of the government’s efforts, said the FBR.
The FBR has further warned the tax evaders to file their tax returns and pay their due taxes within the due date as the government is committed to reviving the national economy by introducing and promoting a healthy tax culture under which all Pakistanis pay their due taxes and contribute to the socio-economic development of the country.
Planning Minister Khusro Bakhtiar said that the FBR needed to redouble its efforts to enhance revenue collection, which is even lower than the regional peers. He said that a 3% increase in tax-to-GDP ratio will provide additional Rs1.2 trillion revenues to the state.
Published in The Express Tribune, October 3rd, 2018.
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