FBR finds 20,000 wealthy non-filers
ISLAMABAD: During the first 100 days of the government, the Federal Board of Revenue (FBR) has identified some 20,000 high net-worth non-filers.
The 68-page document — on six sectors — was released in an effort to highlight incumbent government’s achievements in its first 100 days of government including the steps to revive the economy.
According to the report, in its drive against non-filers, the FBR has issued notices to more than 3,000 high net-worth individuals with tangible assets — including houses in the posh areas of big cities — in the first 100 days.
While launching the report, Prime Minister Imran Khan lamented that only 72,000 people in Pakistan declared their income above Rs200,000. Mentioning the paltry number, he said that these many people can be found only in Islamabad with income equal or above Rs200,000.
PM urged the FBR to widen the tax net, linking low tax collection to rising inflation.
The document also mentions FBR’s collection of data on 150,000 foreign accounts maintained by Pakistan’s residents. The data was received from 29 countries under a multilateral convention on exchange of tax-related information.
The report highlights that as part of its tax policy, recently approved by the PM, the government seeks to abolish withholding tax on banking transactions and reduce income tax on banking sector for SME, low-cost housing, and agriculture related lending from 35 per cent to 30pc from July 2019 onwards.
The report also includes measures to harmonise sales tax collection across provinces, review all tax exemptions, prohibiting future tax exemptions without independent cost estimates and introduction of sunset clauses in exemptions.
Shifting from ad-hoc tax policies, the report also mentions medium-term policy framework launched by the government to guide annual budgets.
In a bid to strengthen the operational capabilities at the FBR, the board will undertake reforms to enhance its analytics capability, introduce technology-based surveys in major commercial areas and install electronic systems to check phone smuggling.
The reforms include speedy resolution of pending litigation and audits, activation of alternative dispute resolution mechanism, collection of pending arrears and improved audit targeting underway.
The report includes a three-year road map for tax reforms. Under the administrative measures, reforms include digitisation of business processes, customer service improvement, using technology to minimise interface between taxpayers and collectors, national single window for customs, minimising tax collectors’ discretion, inspectors, appraisers and auditors.
Furthermore, the measures also aim to reform the internal audit wing of FBR which will be subsequently linked with the PM office. The reforms include simplification of tax laws and introducing a one window system with the provinces for tax collection.
The FBR seeks to introduce technology by establishing central analytics unit to utilise big data and artificial intelligence in addition to forming an integrity and performance management unit to ensure effective internal controls.
Published in Dawn, November 30th, 2018