Taxman cracks down hard on non-filers

The Federal Board of Revenue (FBR) has launched a major crackdown on tax evaders, issuing notices to 800,000 individuals identified as having taxable income but failing to file tax returns.

This proactive move comes after a briefing to a visiting technical team of the International Monetary Fund (IMF) that the implementation of the plan to expand the tax net and boost the government revenues has begun, sources have said.

The FBR has collected data on approximately 1.5 million individuals through data integration with the National Database and Registration Authority (NADRA). This data is being cross-matched to identify individuals with taxable income who are not complying with tax regulations, FBR sources said.

FBR sources have also confirmed that the IMF's technical team, during its recent visit to Pakistan, was briefed on this initiative and the efforts being made to improve tax collection and increase the tax-to-GDP ratio.

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To further enhance tax enforcement, 145 district tax offices (DTOs) across Pakistan have been activated. These DTOs, working in collaboration with NADRA, are actively tracking down individuals who are evading taxes despite possessing taxable income.

The FBR has a multi-pronged approach to tackling tax evasion.

Initially, the non-filers are being issued notices. If they fail to comply, the FBR can take further action, including snapping their electricity and gas connections, and even blocking mobile phone SIM cards issued in the individual's name.

These measures can only be reversed only upon obtaining a no-objection certificate (NOC) from the FBR.

The IMF technical team has also been briefed on plans to amend the tax policy in collaboration with the FBR to broadening the tax net and generate more revenues.

Additionally, the FBR is working on developing the necessary infrastructure to introduce a new scheme for retailers. This scheme is expected to bring an estimated 1 to 1.5 million additional individuals into the tax net, increasing the total number of taxpayers to 6 million by June 2024.

This comprehensive tax enforcement initiative by the FBR, in line with the IMF's recommendations, is a significant step towards achieving a sustainable and equitable tax system in Pakistan.