FBR to invoke drastic powers in new move to widen tax base

ISLAMABAD: In order to bring 1.5 to 2 million new taxpayers, the caretaker federal government has established 145 District Tax Officers (DTOs) across the country.

The Federal Board of Revenue (FBR) has secured drastic powers under Income Tax Law authorising the tax department to disconnect utility connections including electricity and gas connections and block mobile SIMs if a return is not filed in response to notices issued.

Out of a total of 240 million population, there were hardly 4.9 million return filers during the last financial year. There are around two million return filers who filed nil returns, so there is a great possibility to find out potential non-filers/ tax dodgers to broaden the tax base.

The FBR on Friday notified the offices of 145 DTOs to broaden the tax base, ultimately raising tax-to-GDP ratio to a desired level. The DTOs would focus on bringing 1.5 to 2 million new taxpayers into the tax net till June 2024 by enforcing Income Tax Returns from non-filers and stop filers.

The DTOs would be Inland Revenue Officers of BPS-17/18. They would obtain and utilise third party data acquired from multiple departments and agencies that hold critical information regarding investment in assets and incurring of huge expenditures by potential taxpayers who till now have managed to escape and stay away from the taxation system including registration and filing of tax returns.

One of the tools to be utilised for this purpose would be invoking recently introduced Section 114B in the Income Tax Ordinance 2001 which authorises the department to disconnect utility connections, including electricity and gas connections, and blocking of mobile SIMs, if return is not filed in response to notices issued. A new Documentation Law is also being introduced to obligate various agencies/ departments to provide data to the FBR through automated common transmission system.