FBR staff unveiled as non-filers

Hundreds of FBR employees failed to file tax returns, wealth statements

ISLAMABAD:

Hundreds of employees of the Federal Board of Revenue (FBR) are chronic non-filers, exposing them to the risk of severe penalties and putting the resolve of the tax administration to broaden the national tax base to the test.

Official documents and background interactions with the tax authorities revealed that a large number of the employees of the FBR have not filed their tax returns for tax years 2021, 2022, and 2023.

Some have filed returns for one year but then did not file their annual statutory income tax and wealth statements for another two years, showed the documents. In certain cases, the returns were not filed for the current tax year whose last extended date for filing was October 30th.

When contacted, Chairman FBR Amjad Zubair Tiwana said that all those FBR officers who have not yet filed their returns would receive notices by Saturday. Tiwana said that a majority of these non-filers got extensions for filing returns, which expired on Thursday.

The chairman said that the non-compliant officers are now at risk of administrative measures, including disconnection of their utility connections.

A senior FBR officer said that out of over 3,200 total officers in the pay scales of 17 to 22, nearly 2,600 have submitted their tax statements for this year.

However, details showed that in addition to about 600 officers, hundreds of non-gazetted FBR employees have not filed their annual income tax returns and wealth statements. It is widely believed that low-ranking employees, particularly income tax inspectors and appraisers of the Customs department, also indulge in corrupt practices. It is not just their salary that makes it binding for them to file their returns, the nature of their assets also require low-grade officers to file their annual income tax returns and wealth statements.

“Non-filing of returns by the employees of FBR is quite upsetting for us as an organisation and needs to be addressed on an urgent basis,” reads a letter written to the head of one field formation of Karachi where as many as 307 employees did not file their returns.

The head of the field formation was instructed to immediately direct his chronic non-filers fellows to submit their returns, according to the documents.

The law binds all citizens of Pakistan, including civilian and military, to submit their annual tax returns if their annual income is Rs600,000 or more, or a person owns a home, or a car of 1,000 cc. The statutory deadline was September 30th, which the FBR extended till October.

The law allows that the taxpayers can seek individual extension which some of the FBR officers availed but others did not.

The FBR chairman on Wednesday informed the Senate Standing Committee on Finance that the board has decided to exercise powers to suspend mobile Sim cards, electricity and gas connections of non-filers. He said that these measures are being taken to expand the tax base to nearly 6.9 million filers by June next year.

Read: FBR exceeds tax target, avoids mini budget

However, the FBR has not yet exercised these powers against its own employees. Many officers have been non-filers for the past three years.

The FBR chairman further informed the committee that so far only 3.3 million people had filed their taxes for this year – a figure that he has to more than double in the remaining seven months to achieve the goal of 6.9 million filers.

The government has already notified a committee under a serving three-star general, Lt General Munir Afsar, for broadening of the tax base.

There are nearly 17,000 sanctioned posts of the Inland Revenue Service across Pakistan and another 9,500 of Pakistan Customs, making it one of the larger civilian organisations of the country.

The FBR chairman further informed that there were 11.4 million registered people for income tax purposes but only 3.3 million or 29% filed their mandatory statements.

Instead of immediately proceeding against its employees, the FBR has directed the head of its field formations to recover the penalty from the salaries of the non-filers after December 31st, according to the documents.

In the case of another large tax office of the country, there were 183 non-filers, showed details. These include both officers and officials serving against low pay scales.

Although the FBR has not moved decisively against its own employees, the field formations have reached out to the country’s top companies with a reminder to ask their employees to fulfill their legal requirement of filing returns.

The documents showed that where one FBR field office has restricted service-related benefits of non-filers, those serving in 25 other FBR offices were still receiving those benefits.

The low tax base due to the exclusion of sectors like real estate, exporters, and agriculture has shifted the entire burden on a few classes – the salaried class and industrialists. The salaried class is paying almost 300% more tax than the country’s richest exporters.

Pakistan’s tax-to-GDP ratio dropped to 9% during the last IMF programme period and in spite of a $400 million World Bank loan for the FBR to broaden the tax base and fixing the ills of the taxation system.

Published in The Express Tribune, December 1^st, 2023.

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