The Federal Board of Revenue (FBR) is taking decisive steps to boost tax compliance, announcing stringent measures for those who fail to file their tax returns in response to issued notices. The recently introduced section 114B in the Income Tax Ordinance, 2001 empowers the FBR to disconnect utility connections, such as electricity and gas, and block mobile SIMs for non-compliance.
In a significant restructuring move, the FBR has established 145 District Tax Offices with a targeted mission to bring 1.5 to 2 million new taxpayers into the system by June 2024. Emphasizing the significance of revenue generation and the need to increase the number of tax filers, the Prime Minister has championed these efforts in recent meetings.
The establishment of these District Tax Offices marks a pivotal moment in expanding the tax net, aiming to fill critical gaps and elevate the tax-to-GDP ratio to desired levels. Each office will be led by a dedicated District Tax Officer responsible for enforcing Income Tax Returns from non-filers and stopping tax evaders.
These offices signal a new era in tax administration, with a focus on capturing all potential taxpayers who have thus far managed to evade the system. Headed by committed Inland Revenue Officers in BS-17/18, these offices will leverage third-party data obtained from various departments and agencies to identify individuals with significant investments and expenditures who have avoided the tax system.
To support these efforts, a new Documentation Law introduced, compelling agencies and departments to provide data to the FBR through an automated common transmission system. Collaboration with the National Database and Registration Authority (NADRA) is also underway, with the Chairman of NADRA assuring assistance for widening the tax base through data integration.
This comprehensive initiative not only strengthens the FBR’s capacity to enforce tax laws but also aims to facilitate taxpayers in filing their returns by establishing dedicated offices. The move underscores the commitment to creating a fair and inclusive tax system while ensuring that those who evade taxes held accountable.
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