ISLAMABAD: The Federal Board of Revenue (FBR) has used data of Withholding Taxes on account of transferring of properties, registration of vehicles, electricity connections and others for identifying 10,000 high-value non-filers in first batch but such efforts had failed to yield any positive results for broadening of tax base in the past, The News has learnt.
The FBR’s official briefed the Prime Minister Shahid Khaqan Abbasi last week during an official meeting on “Tax Reforms” that the broadening of tax base was top priority as they identified 10,000 high worth individuals who were spending a lot of money for living and maintaining luxurious lifestyle but they were reluctant to file their income tax returns.
“The FBR has identified 10,000 high worth individuals through using withholding (WHT) data and now tax notices will be issued under section 114 of Income Tax Ordinance 2001 in order to lure non-filers for filing of returns in ‘polite manner’,” said one official of FBR on Monday.
But what the Prime Minister was not told during this meeting is that the FBR had launched same scheme for broadening of tax base under the IMF programme for three years under the PML-N-led regime but it had failed to achieve the desired results in a big way.
“We do not have reliable data as in last exercise the FBR used data of electricity connections for sending tax notices but in reality, the utilities connections do not confirm that the same individual is owner of the business outfit,” said the official and added that it caused failure in broadening of tax base exercise in most of the time in past.
“Without verifying health of the data, the broadening of tax base cannot be achieved through unreliable data. It simply means garbage in and garbage out,” said the official.
FBR Member Inland Revenue Service (IRS) Policy who also holds portfolio of Spokesman Dr Iqbal, he said on Monday that the FBR had started sending tax notices to 10,000 high worth individuals after analysing data from withholding taxes. He said this exercise started with 10,000 at first stage.
When asked about reasons of failure of broadening of such scheme in the past, he said that this scheme was not failed one as it helped achieving broadening of tax base when the FBR sent out tax notices with the help of data.
“But this scheme was stopped due to unknown reasons in the past otherwise it could have helped bringing many more into tax net so far,” he added.
To another query that how much tax revenue went up because of broadening exercise, he said that the tax collection because of this exercise was not available right now but these figures could be shared with the media.
