New ordinance issued to broaden tax net

NADRA will share its records and any other information with the FBR, according to the ordinance

President Arif Alvi promulgated on Friday the Tax Laws (Third Amendment) Ordinance 2021 to allow the Federal Board of Revenue (FBR) to share its data with the National Database and Registration Authority (NADRA) with the objective to broaden the tax net, a media report said.

The ordinance aimed at empowering the relevant authorities to disconnect mobile phones/SIMS [subscriber identity modules], electricity and gas connections of persons who are required to file tax returns but fail to appear on the Active Taxpayer List (ATL).

According to the ordinance, NADRA will share its records and any other information with the FBR. The ordinance also proposes strict penalties not filing the tax returns, including a penalty of Rs1,000 per day of default.

The ordinance identifies professionals as accountants, lawyers, doctors, dentists, health professionals, engineers, architects, information technology professionals, tutors, trainers, and other persons engaged in the provision of services.

The government has also increased the amount of penalty for tier-1 retailers, who are not integrated with the FBR and imposed an additional advance tax on rates ranging from 5% to 35% on professionals using domestic electricity connections.