FBR issues 20,000 notices to net evaders

KARACHI: The Federal Board of Revenue (FBR) has started issuing notices to tax evaders, mainly high net-worth individuals, on the basis of information obtained from the tax profiling system.

A notice contains all type of undeclared transactions made by a person on their CNIC, sources said. Around 20,000 notices have been issued by the Regional Tax Office (RTO) – II Karachi to high net-worth and high profile individuals.

The individuals have been identified through Tax Profiling System that was launched by the FBR on June 20, 2019. The FBR fed information of persons who made transactions under Income Tax Ordinance, 2001 and either concealed or did not declare the same to the tax authorities.

The purpose of the tax profiling system was to inform people about their transactions in various categories, including car purchase, immovable property transaction, receipt of bank profit, deductions of cash and non-cash transactions through banking system, fee paid to educational institutions etc made during tax year 2018 and past years.

The FBR asked those persons to file their returns for tax year 2018 and in this regard the revenue body had even extended the last date for filing the returns up to August 9, 2019. However, a large number of individuals failed to avail the offer. Hence the notices have been issued under section 114 of the Income Tax Ordinance, 2001 to force such non-compliant persons to file their returns.

Sources in RTO-II Karachi said the definition of high net-worth individuals was not restricted to directors or executives of companies, but it also included persons purchasing luxury vehicles and high valued immovable properties.

Similarly, the high profile cases include those persons who are politicians, sportsman, showbiz personalities etc. Sources said that the tax profiling system of the FBR compiled data of a person on the basis of details provided by withholding agents. The information has been provided by motor vehicle registration authorities, motor vehicle assemblers, immovable property registrars, banks, electric and gas providing companies, educational institutions etc.

Badaruddin Ahmed Qureshi, chief commissioner, Inland Revenue, said that under income tax ordinance, persons who own a certain area of land, flat, motor vehicle above 1000cc, industrial/commercial electric and gas connections were required to file annual income tax returns.

The chief commissioner said the notices issued to persons contained information with evidence of transactions. Giving example, he said the tax authorities provided evidence of cash and non-cash transactions, purchase of car and immovable properties and many other transactions made on their CNIC. The chief commissioner said it was polite intimation to the persons to file their returns and wealth statements for respective tax years. He also said if a person claims that tax was paid / deducted they should not hesitate to file their return because tax authorities would be lenient in such case and avoid any coercive action.