ISLAMABAD: The Federal Board of Revenue (FBR) has sent out tax notices to 75,000 non-filers in the first phase who did not bother to file their tax returns during the current fiscal year 2014-15, fbr times has learnt. After receiving income tax returns of just over 0.8 million in the ongoing fiscal year despite extending the deadline several times, the FBR has started sending out tax notices to those non-filers who did not file their tax returns during the current fiscal year. “We have so far analysed 431,000 returns which were filed through e-filing system and tax notices were sent to those who possessed the National Tax Number (NTN) and filed their returns last year but they did not file their return during the current fiscal year,” official sources in the FBR confirmed to fbr times here on Saturday. The FBR’s subsidiary, Pakistan Revenue Authority Limited (PRAL) has been assigned to send tax notices to potential non-filers in phases. Under the Income Tax Ordinance 2001, the ex-parte assessment will be done against those non-filers under Section 114 (4) who will not bother to reply after lapse of one month. The officials in FBR said that the FBR received e-filing of returns to the tune of 4, 31,000 and remaining around 3, 80,000 returns received manually. The FBR’s PRAL has started analysing returns which were received through e filing system while returns received manually would be analysed during the second phase. The IMF has already projected downward revision in the FBR’s tax collection target from Rs2,810 billion to Rs2756 billion for the current fiscal year. In a bid to broaden the narrowed tax base under IMF’s condition for bailout package of $6.67 billion, the FBR has also issued 139,110 first-time notices to potential taxpayers as of end September 2014, ahead of the schedule for an eventual 300,000 notices. So far, 20,000 new individuals have registered and filed tax returns. At the same time, the authorities have launched a GST collection scheme for around 25,000 large retailers and over 1.3 million small retailers. The FBR is also making a greater use of information technology to broaden the tax base and to strengthen tax compliance by collecting data from multiple sources (such as property and motor vehicle transactions and international travel). In this context, to better manage tax compliance and enforcement, expansion of the FBR’s information reporting processes and technologies by merging the National Tax Number (NTN) system covering 3.6 million individuals with the Computerised National Identity Card (CNIC) database that covers about 150 million people is crucial. Given the low level of tax compliance and widespread evasion, the FBR is implementing a strategy to address structural flaws in the tax system, improve tax administration, and induce behavioral change among taxpayers. In particular, the tax authorities have: (i) issued notices to potential taxpayers and provided incentives to tax compliance; (ii) initiated the tendering of electronic volume tracking of production to improve sales tax collection; (iii) started the field surveys of potential high net worth taxpayers to broaden both the sales and income tax bases; and (iv) implemented an IT solution for tax refunds (computerised risk-based evaluation of sales tax or CREST) that identifies discrepancies in sales tax invoices at different stages and imposes an effective control mechanism for fake invoices and inadmissible refunds. These steps are expected to expand the tax base and improve tax compliance. The FBR is also intensifying actions in auditing and enforcement, including to: (i) legally charge tax evaders; (ii) temporarily close businesses and/or attach properties of tax offenders; and (iii) attach bank accounts of tax defaulters to withdraw the assessed tax liability directly from their accounts. As part of the programme, the tax authorities have now established quarterly revenue targets to improve accountability and transparency in FBR’s administration.
Posted on: Sun, 28 Dec 2014 11:23:06 +0000
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