FBR identifies 7.4m tax evaders

ISLAMABAD: The Special Assistant to Prime Minister on Revenues, Dr Waqar Masood, has said the FBR identified a staggering 7.4 million potential non-filers who undertook multi-billion rupees transactions and paid withholding taxes for purchasing properties, vehicles and other luxurious items but refused to come into the tax net.

“In the first batch, the FBR identified 250,000 individuals out of one million filers who claimed absolutely no income but the FBR found them to have paid Rs 20 billion withholding taxes. After excluding salaried persons, the FBR selected 70,000 biggest asset holders and served them very polite tax notices. With increased usage of technology, tax evasion will become impossible,” Dr Waqar Masood said in an exclusive interview with The News here at the FBR headquarters on Thursday.

He said that the FBR divided the whole database into four to five classes as there were 6.4 million National Tax Number (NTN) holders out of which 2.7 million were filing returns, leaving 3.7 million who were not filing their returns. They were not filing returns for the last five years, he added. He said that the FBR would come up with a policy about these non filers after the expiry of due date of filing of returns on December 8, 2020. He ruled out possibility of any further extension in the last date for filing of returns and said that the law of the land would take its course for the violators.

Dr Waqar said that when the lifestyle of 3.7 million non-filers was analyzed for the last three years, the FBR came to know that these people paid Rs100 billion in the shape of withholding taxes. It indicates that they were conducting transactions worth billions of rupees.

He said that the FBR also acquired data from land authorities like CDA, LDA, KDA and others, building a database of 8.9 million. The FBR excluded 1.5 million filers who had filed returns on average in the last three years, so the remaining 7.4 million are our potential target.

Thirdly, he said all the cellular mobile companies provided data of 100 million subscribers and even if 90 percent are excluded from them, then 10 million are potential non-filers. “It’s our challenge to convert this database to taxability, so technology will be utilized to expand the tax base,” he said and added that they had identified 70,000 potential non-filers from the list of 2.7 million filers as one million showed no income. The FBR detected that they paid Rs20 billion withholding taxes while piling up extraordinary assets.

The FBR records show that these 7.4 million should be part of the tax system, he said and added that there would be physical interaction with these potential non-filers.

The FBR plans to bring 7.4 million non filers into the tax net as the FBR has developed Tax-Ray on IRIS of FBR website where everyone could go to see what kind of information the FBR possesses against each national of the country. If 250,000 non filers are paying Rs 20 billion withholding taxes, then their transaction would be over Rs200 billion, he added.

There are 272,000 sales tax registered establishments and 168,000 were filing returns, so 105,000 units were not filing returns. There are over 100,000 companies out of which 45,000 were filing returns. About tax collection target of Rs4,963 billion, he said that the Ministry of Finance would decide about it. The corporate income tax reforms are on the cards but it is not yet decided when these exemptions will be withdrawn. The government is also considering to reduce the number of withholding taxes, he added.

He said that Track and Trace system would be brought for major sectors like sugar, cement, fertilizer, tobacco and beverages and its their deadline to award contract to winners till December 31, 2020. There will be bidders’ conference on Friday (today), he concluded.