FBR tests digital system to check tax evasion

KARACHI: The Federal Board of Revenue (FBR) is beta-testing an artificial intelligence-powered system to curb tax evasion and avoidance with the platform expected to launch within the next two years, its chairman said on Saturday.

Chairman FBR Jehanzeb Khan said the system identified 6,000 individuals who were spending way more than their tax payments as test case. Tax demands of three billion rupees were created and of which Rs1.75 billion was recovered.

“The system would be implemented in two years,” Khan said, addressing a meeting at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). “Times have changed and a lot of information about people is already available on various digital forums, which would be integrated in the FBR’s system,” he added.

FBR chief said the system would identify the tax evaders and avoiders based on their pattern of spending, revenues and tax payments, and such people would automatically be issued notices.

Khan said the tax authority is all set to digitise the revenue collection system to facilitate tax payment, simplify procedures and eliminate in-person interaction between taxpayers and the officials. On revenue shortfall, Chairman FBR said the government announced several business facilitation measures in the supplementary finance bill, which directly affected revenue collection. “There is revenue collection shortfall of Rs220 billion and we need your assistance in bringing macroeconomic stability, which in turn spurs investment,” he added.

On stuck refunds, Khan said the promissory notes against sales tax refunds would be issued in April.

“There will be more business facilitation measures in the upcoming budget,” FBR Chief said. He urged the business community to furnish their budget related proposals by the end of March. He said the country does not have a tax policy even after 70 years of partition. “Therefore, a tax policy is being drafted defining milestones, targets and facilitation measures,” he added. FBR will remove unnecessary taxes while withholding tax would be reduced to minimal. Member Inland Revenue Seema Shakeel said FBR wants to facilitate taxpayers and encourage documentation of economy. Shakeel asked the trade bodies to encourage their members to get them registered.

“Tax evasion is a big problem,” she said. “Most of the registered persons conceal their income and park their funds in benami accounts. The registered persons should come clean and pay their taxes honestly.” The official said FBR’s action never means to harass taxpayers and it aims at revenue collection.

President FPCCI Daru Khan Achakzai and Senior Vice President Mirza Ikhtiyar Baig apprised the FBR Chief of the issues and harassment faced by the business community.

Achakzai said the FBR teams have been conducting raids on the premises of national tax number-registered businessmen, which is quite unnecessary. Such taxpayers should be issued notices first. Baig said FPCCI supports documentation of economy and urged the FBR chief to take notice of harassment of taxpayers by the tax collecting officials.