FBR sets up new unit to increase returns filing

KARACHI: The Federal Board of Revenue (FBR) has established a new unit of broadening of tax base (BTB) at Regional Tax Office (RTO)-III Karachi to increase the number of return filers to eight million in the next couple of years, sources said on Wednesday.

The sources said the FBR conferred powers of BTB to RTO-II Karachi in May 2019, which resulted in a massive rise in returns filing for the tax year 2018. The FBR established the BTB unit at RTO-III Karachi this month and authorised officers of the office to exercise powers under the Income Tax Ordinance, 2001 to take action against potential taxpayers or individuals who have taxable income but are not on the tax roll.

The sources said the two RTOs would share territorial jurisdiction in Karachi after the creation of new BTB unit. The RTO-II Karachi has been authorised to take action in the areas of Karachi division of Sindh, which covers Saddar, Lyari, and Jamshed, Kemari, Orangi towns, Liaquatabad, SITE, Baldia, Defence Housing Authority, Clifton, Kemari, Manora and Clifton cantonments.

The RTO-III Karachi has been authorised to take action against all cases of persons who are not registered under the Income Tax Ordinance, 2001 and who are carrying on business within the territorial jurisdiction of Karachi division, covering Gulberg, Gadap Shah Faisal, Malir towns, New Karachi, North Nazimabad, New Nazimabad, Gulshan-e-Iqbal, Gulistan-e-Jauhar, Bin Qasim, Landhi, Faisal, Korangi, and Malir cantonments.

The sources said the FBR received 2.5 million income tax returns for the tax year 2018 by extending deadline to August 09, 2019. It is worth mentioning that the FBR issued active taxpayers list for tax year 2018 issued on March 1, 2019 and showed that the number of return filers was only 1.6 million.

It means the FBR received 0.9 million more returns through frequent extension of last dates for return filing. The sources said huge amount of return filing was received due to efforts of RTO-II Karachi, which launched campaign to bring new taxpayers into the tax net.

The sources said around 300,000 returns were filed by residents of Karachi during the period of July to August 9, 2019. The sources said there is potential of new taxpayers despite large number of return filing as RTO-II Karachi has workforce problems in implementing relevant laws.

Therefore, the new commissionerate was established at RTO-III Karachi. The FBR is aiming to increase the return filing number to 5 million in next two years and exploring all possible avenues for bringing persons having taxable income into the tax net.