ISLAMABAD: The government has drafted a new plan to broaden the tax net in phases as part of a revenue drive.

“We have finalised a comprehensive plan in this regard,” a senior tax official told Dawn on Monday.

The plan will soon be submitted to Prime Minister Shahid Khaqan Abbasi for approval after getting further feedback in the last meeting on broadening of the tax base.

The list of potential taxpayers is being finalised on the basis of financial transactions and data collected from various sources including National Data and Registration Authority (NADRA).

The real estate sector is in the spotlight since it is a leading destination for tax-evaded money.

The official said Federal Bureau of Revenue (FBR) has detected almost 20,000 people with millions of rupees in real estate investments but no tax returns. The list was compiled from withholding taxes collected from transactions on real estate.

On the basis of this information, it was decided to send notices to almost 10,000 rich people in the first stage while the other half will be issued notices in the next phase, the official said. However, the official said, it was possible the notices could be issued in one go.

List of 20,000 people has been compiled for those who have large real estate holdings but file no tax returns

FBR has also collected data on individuals paying high tuition fees but didn’t file tax returns.

It is further documenting records on foreign travels of influential people from Civil Aviation Authority, the official said, adding “We are also getting details from telecom companies regarding bills to identify non-filers”.

In the tax year 2017, FBR has received 1.1m returns from the taxpayers as against approximately 4m national tax numbers issued.

The premier has directed FBR to engage NADRA for getting data on people who live in posh areas, have multiple bank accounts and frequently make foreign visits yet do not figure on the tax rolls.

In principle, the official said it was decided to seek help from NADRA for identification of new taxpayers who can be brought into the tax net.

Government has already established a broadening of tax base (BTB) wing at FBR headquarters with dedicated departments in all regional tax offices and large taxpayer units across the country.

The notices will be served through the concerned BTB offices, the official added.

To strengthen the enforcement mechanism for the broadening plan, various decisions have been made by the FBR which include initiation of statutory proceedings against persons who failed to respond to outreach notifications through issuance of notices under the Income Tax Ordinance, 2001.

In case of taxpayer’s persistence on non-compliance, provisional assessment would be finalised and the taxpayer would still have the option to file a return accompanied by a wealth statement and reconciliation of wealth statement within 60 days whereby provisional assessment order would be automatically vitiated.

If the taxpayer does not file the return and required documents within 60 days, the tax liability raised as per the provisional assessment order would become final and would be recoverable and, if necessary, penalties and prosecution proceedings, which may culminate in imprisonment and imposition of fine, would also be initiated in select cases for creating a credible deterrence.

Published in Dawn, January 23rd, 2018