FBR mulls turning to whistle-blowers to catch tax dodgers

ISLAMABAD: With the possibility of resumption of publishing Tax Directory after a pause of several years, the Federal Board of Revenue (FBR) is considering permitting whistle-blowers from the private sector to secure authentic information for the purpose of catching potential tax dodgers.

The FBR is going to share a certain percentage out of the collected amount from tax evaders with the help of the private sector whistleblowers’ companies in the range of 5 to 10 percent, depending on the volume of the evaded tax amount. The filthy rich, who prefer to deceive the tax system, will not be spared at all, said the FBR high-ups.

The FBR is considering the publication of the Tax Directory, which was last published for the Tax Year 2019, but afterwards it was halted owing to unknown reasons. Apparently, this move was stopped to bestow benefits to those who were unable to explain multimillion rupee assets/incomes despite living beyond their declared means.

Although the publication of the Tax Directory was launched during the tenure of the PML-N from 2013-18, and then it continued in the PTI-led regime, this practice has been discontinued for the last several years.

The government is now considering publishing the Tax Directory again. In the past, the tax directory of parliamentarians and tax directory of all return filers were published.

Now the federal cabinet is going to consider approval for the resumption of practice for publishing Tax Directory for last fiscal year 2025. “The FBR is going to send summary to the federal cabinet for getting permission”, said the official.

In another linked development, the FBR will seek permission for the placement of private sector companies for the purpose of whistleblower to get information about potential tax dodgers. If tax information is found correct and result into collection of tax amount, the FBR will provide certain percentage of amount to the company. The FBR plans to grant permission of about 100 such companies for the purpose of whistleblowers.

Earlier, it was considered to grant permission of sharing secret information from individuals but there are certain restrictions imposed by the higher judiciary for sharing secret information. Now the FBR will pitch private sector firms against the private sector individuals and firms to get such information that can be translated into taxability.

Instead of hiring inspectors who can be managed easily by wealthy people, the FBR has decided utilising digitisation of economy and then cross match the information with the declared income and actual income determined on the basis of authentic information.

The FBR had received more than 7.2 million returns in the last fiscal year but it remained futile exercise mainly because there was rampant surge in the cases of nil filers who came into the tax net only for the purpose of remaining in Active Taxpayer List (ATL).