FBR tries to plug in tax evasion of agricultural income

ISLAMABAD: In line with the government’s resolve towards broadening of tax base and documentation of economy, Dr. Muhammad Ashfaque Ahmed, Chairman FBR, has initiated a huge challenge to plug in tax evasion of agricultural income through close cooperation between the FBR and provincial tax authorities to ensure that no taxable income goes untaxed and due taxes are paid in respective collecting jurisdiction.

Accordingly, the chairman FBR has issued a letter to all the provincial governments for proactive collaboration. He has offered to coordinate a technical level meeting to address the issues related to taxable agricultural income and curb tax evasion in national interest.

The FBR chairman has proposed technical collaboration between the FBR and provincial tax authorities on agricultural income, which is taxed by the provinces and is exempt from federal income tax. The chairman has also highlighted that tax evaders claim agricultural income as exempt in FBR returns and do not pay tax either to FBR or provincial governments. The Income Tax Ordinance prescribes that agricultural income will be exempt only if provincial income tax is paid on it.

To strengthen the enforcement of tax laws, the FBR has extended cooperation to provincial governments by offering to issue system generated notices to taxpayers who declare agricultural income in federal income tax returns, to duly discharge their tax liabilities with the provinces.

This offer of cooperation by the FBR is in the interest of national revenues to ensure that persons earning agricultural income may pay due tax to the provinces and that no income goes untaxed by both the FBR and provincial governments.