FBR identifies five sectors to broaden tax net

The Nation

Bureau to examine data of bank account holders about Rs500,000 threshold with SBP’s help It will take info about frequent foreign travelers with the assistance of FIA and Nadra
ISLAMABAD – The Federal Board of Revenue (FBR) has identified five sectors for unearthing new taxpayers in the country to broaden the tax base of the country, which is extremely low.
The FBR has decided to examine the data of bank account holders about the threshold of Rs500,000 with the assistance of State Bank of Pakistan.
Similarly, data of all industrial and commercial power connections would be obtained from DISCOs and meaningfully extrapolated to ensure filing of tax returns by all concerned.
Furthermore, information above all owners and tenants living in houses of two Kanals or more would be obtained. In this regard, the FBR would take assistance from the registration authorities, housing societies, DHAs and development authorities.
For broadening tax base of the country, the FBR would also seek information above all persons owning luxury vehicles of 2400cc and above would be scrutinized objectively.
Data would be obtained from motor vehicles registration authorities and car manufacturers and car importers. Similarly, the FBR would take information about frequent foreign travelers with the help of Federal Investigation Agency (FIA) and NADRA.
The FBR has issued all these directions to all chief commissioners after Prime Minister Imran Khan expressed concerns over the narrow tax base of the country and low tax to GDP ratio.
“In addition to the above, existing base line date of all the above areas/indicators along with the targets set by field formations for the Tax Year 2019-2020 need to be shared by 11.06.2019 positively, as directed by the Prime Minister.
The Prime Minister will review the performance of the FBR in the context of broadening and widening tax base on monthly basis,” the FBR stated in its directive.
Pakistan’s tax to GDP ratio is extremely low. Only two million Pakistanis file taxes and out of which 1.4 million are salaried. The Advisor to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh had also announced that government would also take steps to broaden the tax base of the country by bringing non-taxpayers into net.
He said new data sources will be explored to identify potential tax payers to bring them into tax net. According to the FBR, there are 341,174 industrial electricity connection and 7000 industrial gas connections in the country.
However, only 38, 937 out of them are sales tax registered, which is too low. Less than 50,000 of the 100,000 companies registered with the Security and Exchange Commission of Pakistan (SECP) are filing their returns.
There are 50 million bank accounts in the country but large numbers of account holder are not paying taxes.

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