ISLAMABAD: Pakistan’s top tax machinery has almost finalised a comprehensive strategy for broadening tax base that may be put into motion along with a documentation drive in January, Dawn has learnt from knowledgeable sources.

The Federal Board of Revenue (FBR) has collected information about 7.2 million individuals from various sources — banks, utility organisations, and excise and taxation departments — and shared the same with the National Database and Registration Authority (Nadra) for verification.

At the same time, Nadra has set aside data of 15m people from its own database. Nadra will process the data to compare it with certain indicators through artificial intelligence to identify non-filers, an official source told Dawn.

“We are expecting to receive the final list of potential taxpayers by the end of the current month,” the official said, adding the list would only include those people who did not exist on the FBR tax roll.

Chairman says documentation drive, set to begin in January, is yet to be finalised

Asked about the number of non-filers or tax evaders likely to be identified through the process, the source said that it was too early to say anything. “It could be a million, maybe less or more. You cannot rule out the presence of taxpayers’ names in the collected data,” the source added.

The list would be uploaded on the FBR website for information of the general public, the source said, adding the data would also be uploaded on a dedicated interactive App so that people could check their details. On the interactive App, people would also be able to verify or reject the information about them, the source said.

A dedicated time period will be given to people to file their returns on a voluntary basis. The documentation drive will begin in January with a mass media campaign to urge people to come under the tax net on a voluntary basis. Legal action will be initiated after the lapse of time for voluntarily filing the tax returns.

Talking to Dawn, FBR Chairman Ashfaq Ahmed said that a new concept was being developed to collect due taxes from all potential taxpayers. Income tax commissioners in the field are working on these lines to bring the untaxed sector into the tax network, he added.

About the documentation drive, he said nothing has been finalised so far. However, he said that FBR is working with Nadra to bring potential taxpayers into the net.

On the issue of data, the FBR chairman said data would be available to potential and current taxpayers in a presentable and comprehensible manner through a web portal. Pragmatic steps had been initiated for the compilation of data with the support of Nadra, he added.

IRS intelligence department

The FBR chairman said that he had issued instructions to the intelligence and investigation department of the Inland Revenue Service (IRS) to confine their work to investigation and not to recovery of untaxed money.

In the past, he said the intelligence department’s mode of working was against the income tax law. The law does not permit investigating and recovering money from the tax evaders, he said.

Mr Ashfaq said that now the directors of the investigation department will send their contravention reports to Director General who after evaluation will submit them to the member operation of IRS.

After verification at the member level, the report will then be sent to the concerned regional tax office or large taxpayer unit for implementation, the chairman said.

Mr Ahmed said a considerable increase had been noted in the benami cases. He further said there was no slowdown in the work of FBR, which according to him had “increased manifold”.

Published in Dawn, December 26th, 2021