FBR has so far sent over 30,000 tax notices, but only 11,000 have been received by the addressees. DESIGN: TALHA AHMED KHAN
Out of over 30,000 notices that the Federal Board of Revenue sent to the big fish, about two-thirds did not reach the potential taxpayers, as their addresses turned out to be fake, reveals a top FBR official, bringing into question effectiveness of the tax net widening drive.
As part of the campaign, the FBR has so far sent over 30,000 tax notices, but only 11,000 have been received by the addressees, said Riffat Shaheen Qazi, Member Facilitation and Taxpayers Education of the FBR.
She was speaking after inaugurating a taxpayer facilitation desk at the National Press Club on Thursday, aimed at facilitating journalists in filing income tax returns.
This disclosure has undermined the government’s flagship drive launched to broaden the extremely narrow tax base and suggested why only 174 people or just 0.5% of over 30,000 have filed income tax returns along with a paltry amount of Rs7.3 million.
Under the $6.7 billion International Monetary Fund loan programme, the government is bound to bring 100,000 identified tax evaders under the net, which currently comprises only 711,000 taxpayers who filed income tax returns last year.
Out of a total of 30,333 notices, over 7,000 were served in Lahore, 3,364 in Peshawar, 2,985 in Multan, 2,434 in Rawalpindi, 2,005 in Karachi, 1,800 in Islamabad, 1,000 in Quetta, 1,400 in Gujranwala, 2,340 in Sialkot, 1,183 in Sargodha and 1,700 in Faisalabad.
The serving of notices to 30,000 people by September this year was also the IMF’s condition.
The FBR sent notices through courier, but it was facing serious difficulties because of wrong addresses and jurisdiction problems, Qazi said.
Blaming the National Database and Registration Authority (NADRA) for the fake addresses, she stressed that it was not a mistake of the FBR. “What would be more accurate than the address given in the Computerised National Identity Card,” said Qazi.
According to another FBR official, in some cases the addresses given were of low-paid employees like drivers and cooks. There have been tendency among the elite that they use names of their servants and kin for buying assets in a bid to dodge state institutions.
During the Pakistan Peoples Party-led government, the FBR in collaboration with NADRA identified about four million people who had a lavish lifestyle but were not paying taxes. They were traced with the help of their expenditure record like purchase of cars and houses, bank balances, international travel and spending on children’s education and marriages.
Last year, former FBR chairman Ali Arshad Hakeem revealed that there was a man in Rawalpindi on whose name over 600 vehicles were registered.
Qazi said the FBR was establishing its own databank in association with various departments. Despite difficulties, she vowed, the campaign would continue, insisting the revenue board was sending tax notices on the basis of solid evidence that could be defended in any court of law.
She ruled out the possibility of conducting a door-to-door survey for gathering information about potential taxpayers.
Qazi also clarified that the Sindh High Court had not barred the FBR from collecting the Income Support Levy that the federal government levied at the rate of 0.5% on both tangible and intangible moveable assets.
SHC only stopped the FBR from collecting the levy from the petitioner who challenged it in the court that too until it decided the petition, she added.
Published in The Express Tribune, October 25th, 2013.
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What a big joke. FBR has made a big deal of sending notices to people for increasing tax base. Today when I came home I found that a notice was served in name of my younger brother who used to live in same house when he was young which is owned by father. Now he has been living abroad for 15 years on NADRA's record of course as he's on passport and NICOP. and we're all cribbing about people aren't filing taxes even when they received notices. For me this shows the due deligence by FBR. There is something called common sense, data sifting/ mining. For Gods sake hire some brains for a change go to an IT university!!
I am not paying a single paisa because I don't get anything for it. We have Police force who are gangsters in uniform and all other govt services requires bribes to be paid. Why should I pay double.
The Babu's need the Taliban for tax collection I suppose
@meekal ahmed: Withholding in most cases is nominal. One has to pay more when filing and this is not happening. For example, service providers get 6% withheld but at the end, they have to file as business individuals (tax rate is much higher). If they don't, they are evading taxes!
@Ch. Allah Daad: Majority of it is collected as indirect tax. Wonder why indirect taxation is that high? It's because people (probably like you) don't pay income tax. And bye the way, the tax collected is no where close to the spending. If you are not paying income tax, don't complain!
Tax Payer
If you include withholding, the number paying "income" tax is around 45 million.
They can't collect tax because it too complicate. Should be one page description instead of some 10 page with accuracy of a computer required. Who would fill them when it take 1 week to get the required documentation and another 2 days just to fill them. Wastage of time and money and cause of frustration and nothing else.
Also What is the point of having a salaried person file for income tax if that is his only source of Income. which is deducted at source. Stupidity or stupid people in FBR ?
@Ch. Allah Daad: The spending problem will stay until you review your desire to snatch Kashmir from India and keep feeding your war machine.
@Asif: Corruption starts from anti- corruption and FBR departments. There ain't no saint in govt.
@zayyad: A very well placed comment. my opinion is synonymous with yours.
@Saleem: Too many laws are a headache to understand and implement. They also provide too many escape routes. Have fewer laws but be determined in their application.
The FBR has never been serious about its agenda and working and if two thirds of the letters go astray, then one can expect a totally non serious approach to the future. Business as usual. The PM should be concerned about hobnobbing between the business persons and the FBR staff. Salams
@zayyad: You are confusing two things. Pakistan's pay taxes when ever we buy petrol, gas etc etc. But most Pakistani's do not file their returns every year which all Pakistani's are suppose too. So the 0.4% is the number that file their taxes and the rest dont file their taxes but that doesnt mean, the rest, dont pay taxes of any kind. While in US, the taxes were deducted from my paycheck and in April when I filed for taxes , I either got money back or I had to pay extra taxes. It was compulsory for all people residing in continental USA to file taxes. I hope this clears the issue of not filing your taxes and not paying your taxes.
Stop increasing the burden on the burden on the already complacent tax paying citizen. Go after the land owners and the political families and those who choose to spend the tax payer's money on lavish cars abroad and the President who chooses to fly everywhere with our hard earned and honest tax returns!!! The load is doubly worse on us! We pay our taxes which leave us drained as is and then on top of that we have to save for our children's education and our healthcare and for our old age because these amenities that the government is suppossed to provide with our tax money are just no where to be found. Instead our hard earned money is blown on fancy foreign trips! Stop this non sense. Give ppl a "return on (their) investment" and ppl will automatically pay taxes more happily!
How on earth were these companies/individuals registered with fake addresses? Doesn't FBR even scrutinize the application to check every detail is correct?!?!?
@Zayyad: Of the 190 million you mentioned, almost 40% of it is below the age of 18, many are above the retirement age, and still many are unemployed. You need to first find out how many individuals fall in the category of "Taxable" before you come up with your absurd figure.
All fakers are aided and abetted by Babus of NADRA and FBR. Long live the Babus.
We are a conservative country, we like to keep it that way.
Why Pakistani parliamentarian don't make laws against providing false information? Are they afraid that they themselves will be the first ones to be prosecuted under those laws?
only 174 people or just 0.5% of over 30,000 have filed income tax returns along with a paltry amount of Rs7.3 million. . And you wonder why IMF makes expanding the tax base an issue? If you don't make a reasonable attempt at paying your own way why should others loan/give you money?
Every year over 2500 arab rupees are collected in direct and indirect taxes. This money is not thrown from sky, its collected from us but in return we don't get anything. There is some problem is tax collection but bigger problem is in spending. No one will pay this government Bhatta anymore.
In a country of 190 million, only 0.7 million pay tax (0.4%). Change will not come to this country, until these political families are removed from the scene..bhuttos, sharifs, chaudhary's, and even after that it will require stern rule-not all this bogus democracy.
All these patriotic Pakistanis refuse to pay their taxes but are quite swift in updating their Facebook statuses with jingoistic rhetoric. Yet they are unwilling to pay for it.