ISLAMABAD: The government has included media persons, sportsmen and real estate tycoons in its hunt list of top tax evaders amid increasing pressure on the Federal Board of Revenue (FBR) to give quick results to address one of the biggest issues of Pakistan’s economy – the yawning budget deficit.
The Chief Commissioners of Inland Revenue Service (CCIR) Conference, a gathering of heads of all field formations of the FBR, on Thursday deliberated over the cases of high-profile tax evaders. The meeting had been convened three weeks after Prime Minister Imran Khan directed tax officers to go after big tax dodgers.
It has been decided to pick top 100 cases from every Regional Tax Office (RTO) and Large Taxpayers Unit (LTU), which will expand the final list to 2,400, according to FBR officials. These 2,400 people are politicians, celebrities, sportsmen, media persons and real estate tycoons, according to the FBR. The chief commissioners’ conference was held on a day when the prime minister once again warned that he may dissolve the FBR due to its extremely poor performance. Addressing a gathering of chambers, PM Khan said he may set up a new organisation if the FBR did not improve its affairs.
The FBR has been constantly under pressure after the PTI came to power last year. The premier, behind closed doors, has grilled the top FBR management for its poor performance.
The FBR’s administration comprises 19 RTOs and four LTUs, being headed by chief commissioners. FBR’s Member Operations Inland Revenue Service Seema Shakil has asked all chief commissioners to bring their own list of top 100 tax evaders.
The preferred areas for selecting the cases should be sportsmen, media personalities, celebrities including singers, politicians and businessmen including real estate tycoons, according to the instructions passed on to the chief commissioners.
However, “due to paucity of time, the top 2,400 tax dodgers could not be selected,” a chief commissioner told The Express Tribune.
But an FBR member said almost all chief commissioners had finalised their lists and 12 of these lists were discussed on Thursday. These cases were being selected on the basis of Tax Directory 2017 on the criterion that the income declared by these people did not match their lifestyles, said the FBR officials.
Since these people are already registered persons, their cases will be dealt with by the Inland Revenue Operations instead of the Directorate General of Broadening of Tax Base.
The FBR on Thursday also appointed Mir Badshah Khan Wazir as the director general of the Directorate of Broadening of Tax Base. The directorate’s main task is to go after unregistered persons and bring them under the tax net.
The FBR also directed its field formations that a sizeable number of parliamentarians should also be selected for sending tax notices on the basis of income declared in their tax returns for tax year 2017, the officials said. The parliamentarians’ cases were also discussed during the commissioners’ conference.
Top 10 parliamentarians in terms of tax contribution paid Rs322 million in taxes, which was equal to 60% of total taxes paid by all members of parliament in tax year 2017. The fifth tax directory of parliamentarians showed that lawmakers, including members of the federal cabinet, paid Rs535 million in taxes during tax year 2017, up Rs139 million or 35%.
Last month, PM Khan ordered the FBR to flex its muscles against big tax evaders and make them cough up nearly Rs200 billion in the next four months. With every passing month, the FBR’s tax shortfall is widening. It sustained a Rs237-billion shortfall in first eight months of the current fiscal year as the collection stood at only Rs2.32 trillion.
The chief commissioners also reviewed the poor tax performance during February as the FBR could collect only Rs268 billion against the target of Rs314 billion.
The government has set the budget deficit target for the current fiscal year at 5.1% of gross domestic product (GDP). But in the first half the deficit widened to 2.7% of GDP or Rs1.03 trillion due to a steep shortfall in tax revenues and higher expenditure on debt servicing and defence needs.
The conference also reviewed the overall progress of a campaign launched to catch high net-worth individuals. The FBR has so far issued more than 6,500 tax notices and recovered nearly Rs1.4 billion in the current fiscal year from these people.
Published in The Express Tribune, March 8th, 2019.