FBR awaits govt go-ahead on blocking non-filers’ CNICs

KARACHI: The Federal Board of Revenue (FBR) is awaiting a nod from the federal government on the blocking of the computerised national identity cards (CNICs) of non-filers of returns for business and financial transactions to increase its filing counts, a top official said on Thursday.

“The decision to block CNIC of non-filers will be taken after an approval from the federal government,” Muhammad Irshad, Member Inland Revenue (Operations) told reporters during a ceremony. 

In April, a meeting of Senate Standing Committee on Finance recommended the FBR to block the CNICs of non-filers to forcibly bring them into the tax net. “The FBR should ensure to evolve a mechanism by which the CNICs of non-filers could be blocked for business/banking transactions to bring all the non-filers into the tax net,” advised the committee.

Member Irshad said a difference in withholding tax rates for filers and non-filers was created to encourage returns filing. He said the higher rate of withholding tax for non-filers is penalty for them.

“That worked for the tax authorities as number of return filers in the tax year 2015 increased significantly to have crossed one million plus,” he added.

Irshad said in the budget 2016/17, withholding tax rates on various transactions, especially on immovable properties, were raised.

In the recent budget, the government amended eighth provisions in the Income Tax Ordinance, 2001 by enhancing the withholding tax rate by 100 percent for both filers and non-filers.

The tax official said the FBR is committed to settle refunds till August 31 according to the directives of the finance minister Ishaq Dar.

He, however, added that the pending refunds were much lower than what was reported in the media. Since the tax departments issue refunds after thorough scrutiny, claims might be deferred for one reason or another.

On rewards for Inland Revenue officers for realizing revenue, the member said in the past the official efforts were not acknowledged. “Reward rules have recently been issued and under the new system the officials don’t have to wait for the year-end instead the FBR will reward them on monthly basis,” he added.

He said the inauguration of officers’ mess is another effort of the FBR to facilitate officials. Several changes were introduced in human resource management of the tax body.

On tax reforms, Irshad said a new large tax unit has been established in Karachi and a separate regional tax office has been designated for the corporate sector to facilitate the taxpayers. “Jurisdiction orders have already been notified.”