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FBR to establish separate unit to boost tax revenue

FBR to establish separate unit to boost tax revenue

KARACHI: With the aim to boost tax revenues, Federal Board of Revenue has decided to establish a separate unit by the month end.

Sources said that the unit will identify new taxpayers and monitor withholding tax collection. At present, the activities of broadening the tax base has been done through existing field staff, who already had other responsibilities of enforcement and audit of the existing taxpayers. Considering the importance, the government announced the establishment of new directorate to broaden the tax base in the budget 2017-18.

In chief commissioners’ conference held last week, the finance minister has directed the FBR to focus on enhancing the number of taxpayers, besides increasing the ratio of direct taxes.

Presently, the lack of tax culture is a major hindrance in narrow tax base. The FBR identified reasons for narrow tax base, which included heavy reliance on indirect taxes; discontinuity of regular survey; the lack of proper and effective enforcement by the FBR offices; the lack of proper computerised stock register; the lack of balance between facilitation and enforcement; and the lack of capacity and motivation to utilise available information.

The FBR has issued National Tax Number (NTN) to around four million people of over 200 million in the country. As per the latest Active Taxpayers List (ATL) issued by the FBR, only 1.23 million taxpayers filed their income tax returns for the tax year 2016.

Sources in the FBR said the new directorate would have its separate enforcement and audit teams to conduct examination of available data of potential taxpayers and through field surveys.

The new directorate would have a strategy of zero-tolerance for non-filers and it would ensure enforcement of returns in the cases of all NTN holders, the sources added.

The new directorate, besides available data of potential taxpayers, will also obtain records from Nadra, telecom companies, banking companies, utility providers, property registration authorities, land developers, provincial excise and taxation authorities, schools, clubs, hotels, domestic and international airlines, dividend, interest, rental income, etc, they said.