FBR finds marriage halls in Rs9.5 billion tax evasion

KARACHI: The Federal Board of Revenue (FBR) has detected around R9.5 billion worth of tax evasion by marriage halls in the past four years, sources said on Monday.

The sources in the FBR said the office of Intelligence and Investigation wing of Inland Revenue recently conducted physical survey of banquet/marriage halls during the ongoing broadening of tax base drive.

The Inland Revenue office visited around 660 marriage halls across the city and inquired them about charges of one function. Charges of marriage halls were variable depending on the location, the sources said.

The sources said the survey identified that the marriage halls arranged total 1,743 functions in one year. The management of marriage halls also collected withholding tax on behalf of the FBR, but failed to deposit the collection in government accounts.

The tax office estimated that the marriage halls would have arranged approximately 6,972 functions in the past four years.

On the basis of the estimate, the tax office calculated that the tax payable by the owners of marriage halls was Rs9.5 billion. However, the payment made by the marriage halls was only Rs410 million in the last four years.

“Therefore, it is established that an amount of around Rs9.46 billion was evaded by the marriage halls,” an official said, requesting anonymity.

The tax office issued notices to the owners of marriage halls and asked them to make compliance with the legal obligations to clear dues within 15 days.

The sources said FBR directed the Inland Revenue office to start real-time monitoring of marriage halls and deducted withholding tax amount. Recently, the Regional Tax Office-II Karachi initiated an action against the professionals.

Recently, the office issued notices to hospitals to provide details of doctors and surgeons working under their management.

Further, the tax office also unearthed huge tax evasion by bridal dress designers. The office issue notices to 24 such dress designers to file income tax returns and declare their transactions.

Tax managers have accelerated efforts to mobilise tax revenue to meet the Rs5.23 trillion revenue target of the current fiscal year of 2019/20, which seems ambitious amid stunted economic growth. In the first seven months, the tax revenue amounted to Rs2.4 trillion. The apex tax authority has to rake in Rs2.8 trillion to meet the annual target.