FBR identifies 26 new sources of information to trace tax evasion

[Naveed Yaseen]

RECORDER REPORT
ISLAMABAD (October 19 2009): The Federal Board of Revenue (FBR) has identified 26 new sources of information for collection of third party data for discovering new taxpayers across the country. Sources told Business Recorder on Sunday that the FBR has chalked out a new strategy to broaden the tax base during the last conference of Director Generals of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs).

The FBR has decided to focus on expenditure of persons in various sectors of the society. The sources of information would be used to check the expenditures made by potential persons operating out of the tax net. It has been estimated that billions of rupees would be generated through effective utilisation of third party data by the FBR.

In the past, the FBR has repeatedly made efforts to use third party data, but unable to bring maximum persons into the tax net. Under the new plan, the data has been divided into two categories ie federal and provincial data, which would be separately used to discover new taxpayers. The federal data would be used for verification and reconciliation of information available with the Securities and Exchange Commission of Pakistan (SECP) and Accountant General of Pakistan (AGPR) etc.

These kinds of organisations are maintaining data at the central level. The headquarters of such organisations would be approached for collection/verification of federal data. The provincial level data would be obtained from the government departments and organisations working at the provincial level. Sources said that out of 26 sources of information for obtaining third party data, one of the organisations is Employees Old Age Benefit Institution ((EOBI) where small and medium institutions and industrial units have been registered. Even the organisation is dealing with the old age benefits, but it has ample data about the institutions registered with the concerned authorities.

The software of Pakistan Revenue Automation Limited (PRAL) would be replicated in all provincial registration authorities for calculation of capital value tax (CVT) on immovable property.

Other sources of information included supplies made to the government departments and autonomous organisations. This would help in obtaining data of potential suppliers from the AGPR. Similarly, data of print and electronic media would be obtained from Pakistan Electronic Media Regulatory Authority (PEMRA). The registration authorities of NGOs would be approached to obtain data of such organisations. Such non-government bodies consider themselves as exempt, but deduct tax from their employees.

Banks would be approached to collect data on credit cards. Another important source of information would be private educational schools, where people are paying huge fees. These private schools would provide necessary information about the persons, who are making huge expenditures on education of their childdren in expensive institution. Other sources of information included housing authorities, property registrars and provincial registration authorities and motor vehicle registration authorities.

The information on domestic and international air travels would also help in checking the expenditures made by the elite class, still out of the tax net. The data of commercial and industrial consumers of electricity paying huge amount of bills would also be checked under the exercise. Big retailers, hotels/clubs, professionals and service providers would be identified with the help of third party data.

The FBR is ready to launch a large-scale exercise to check such kinds of expenditures made by potential person using 26 sources of information and third party data. It is the prime time for the un-registered persons and potential taxpayers to voluntarily come forward and declare their actual income and file the due income tax returns. It is the best time to pay the due taxes and submit their declarations without facing any problem. Taxpayers should realise that the third party data would ultimately help the department to know about their expenses and expenditure. It is better for the general public to voluntarily make declarations to avoid legal complications, sources added.

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