FBR identifies 282,180 new taxpayers;eyes additional Rs19bln revenue

KARACHI: The Federal Board of Revenue (FBR) has identified over a quarter of a million new taxpayers who are likely to add at least another Rs19 billion to government coffers, official sources said on Monday.
“The Directorate General of Broadening of Tax Base (DG BTB) had created Rs19.3 billion new demands against the potential taxpayers since July 2014 to March-end, who were identified through information gathering from various sources,” an official, requesting anonymity, said.
“An amount of Rs9.55 billion has been created as demand at the FBR Headquarters level while remaining Rs9.7 billion was detected through efforts of regional tax offices (RTOs).”
Official said 282,180 notices had been served to potential taxpayers in an ongoing broadening of tax base campaign. “The directorate has received 54,790 income tax returns from new taxpayers and payment of Rs442 million.”
Pakistan’s tax-to-GDP ratio of 9.5 percent is among the lowest in the world and the government is under pressure from foreign donors and lenders to increase collection to boost the struggling economy. The finance ministry aimed to boost the tax-to-GDP ratio to 15 percent in the current fiscal year, ending June 30.
The official said a major chunk of revenue from new tax payers has already been collected in shape of withholding tax and advance payment from those taxpayers.
Revenue authorities have frozen 1,366 bank accounts for the recovery of due tax amount. During a crackdown, they also issued 343 warrants of arrests.
“However, no arrest has been made as identified persons either paid tax and returns or requested for time,” the official added.
The tax authorities also seized 195 properties and 422 vehicles of those taxpayers who defaulted in paying their due liabilities.
The sources said the latest achievement was not possible without information of 3.7 million potential taxpayers received from various departments and association. “The directorate is still sending reminders to a number of organisations for providing information,” one source said.
The information of potential taxpayers received from different sources, included: motor vehicle registration authority of different provincial offices, 814,015; car assemblers of 1,000CC and above, 271,746; power distribution companies, one million; gas connection, 2,323; properties from provincial authorities and Defecne Housing Authority (DHA), 548,248; and Bahria Town/private construction companies, 10,570.
The directorate received information of another 1.05 million potential taxpayers from cell phone companies, Pakistan Medical and Dental Council, Pakistan Engineering Council, Pakistan Bar Council, Jamal’s Yellow Pages of business concerns, universities/colleges, information of traders/vendors/businessmen from NADRA (National Database and Registration Authority) and insurance companies.
The sources said the directorate would take strict action against those who have still not complied with the requirement of information sharing, those included: airlines, banks, distributors of leading multinational companies.
“The Directorate of BTB was intending to make the total taxpayers number in the country to 10 million by end of ongoing fiscal year from around 3.6 million registered with the FBR database,” the source said. The BTB in its exercise also detected another 3.7 million so far.
The official at BTB said the purpose of enforcing filing of income tax return is to detect transactions in the system, which could not be identified on the FBR database until taxpayer is registered. However, the transactions on which withholding tax is deducted are recorded on the FBR database, which helps the authorities to identify new taxpayers, the official said. Currently less than one percent of Pakistanis pay taxes.