FBR’s wing to start on-site raids from next week

KARACHI: A special wing of the Federal Board of Revenue (FBR) tasked to broaden tax base is all set to begin on-site raids across the city from next week to identify incidences of evasion and avoidance, sources said on Wednesday.

The sources said the FBR has finalised strategy to launch raids at a massive scale on tax evaders from next week. The Broadening Tax Base (BTB) Wing of Regional Tax Office (RTO)-Karachi constituted teams for physical inspection on the premises of individuals/enterprises that have taxable income but are not in the tax net.

A tax official confirmed that the Chief Commissioner Inland Revenue RTO-II gave a go-ahead to implement the government’s policy to broaden the tax base. The raids on the premises of non-compliant taxpayers would be started from next week, the official said.

Initially the teams would visit identified shopping plazas and markets to determine income of traders and wholesalers and would issue notices at the spot in case of non-compliance to promote filing of income tax returns and wealth statements.

The official said the RTO has identified shopping hubs, including Zamzama, Hyderi, Khadda market and commercial area of Defence Housing Authority. The teams will also visit newly-established supermarkets to probe source of money for available stocks in order to bring traders who are conducting businesses without registration into the tax net.

The official said that a dedicated team will visit educational institutions to verify their tax compliance. The official said the tax office identified educational institutions, which are charging huge fees but their tax contribution is negligible.

The tax office identified non-compliant educational institutions, including schools, colleges and tuition centres.

The sources said the RTO – II Karachi initiated the exercise of gathering information of tax evaders during the last month. The exercise was initiated considering the massive shortfall on revenue collection during the current fiscal year.

The FBR is facing revenue shortfall of Rs237 billion in the July-February period of the current fiscal year of 2018/19 as the collection stood at Rs2.328 trillion as against the assigned target of Rs2.565 trillion. It seems difficult for the FBR to achieve the desired annual tax collection target of Rs4.398 trillion for FY2019. Tax experts said the FBR is heading towards revenue shortfall in the range of Rs300 to Rs350 billion for the current fiscal year.

The sources in RTO Karachi said the BTB Wing got permission from the FBR to initiate audit exercise against 2,000 individuals who purchased high volume immovable properties but were not on the tax roll. FBR’s centralised system has already issued notices to the individuals for documentation of assets.