FBR nudges hospitals to net non-compliant doctors

KARACHI: The Federal Board of Revenue (FBR), saddled with an ambitious tax collection target for the current fiscal year, on Wednesday started a drive to net well-heeled doctors, asking main hospitals in the city in the first phase to furnish their financial details for cross-verification, as returns filing from the medical practitioners are abysmally low.

The drive was launched against doctors that are non-compliant with the tax laws. In the first phase, notices were sent to leading hospitals for acquiring details of surgeons and physicians.

The broadening of tax base unit of the Regional Tax Office (RTO-II), Karachi issued notices to 30 leading hospitals in the city, asking them to provide personal details of surgeons and physicians.

The sources at the unit said a number physicians and surgeons are registered with the Pakistan Medical and Dental Council (PMDC) – a statutory authority that maintains the official register of medical and dental practitioners in the country – and Sindh Health Care Commission. A number of practitioners were found unregistered with the FBR.

The FBR issued notices to hospitals, namely Dow University Hospital, Mid City Hospital, Jinnah Hospital, Liaquat National Hospital, Aga Khan University Hospital, Ziauddin Medical Centre Hospital, Nehal Hospital and Hamdard University Hospital.

Chief Commissioner Badaruddin Qureshi of RTO-II said the office has already received information about the non-compliant doctors and their incomes. PMDC has 68,000 registered doctors and out of which only 6,500 are filing annual income tax returns, he said earlier this month.

Tax administration has been rendering efforts to increase number of return filers for long. It slaps penalty in shape of additional withholding tax on financial transactions by non-filers and increased tax incidence to net potential taxpayers. But, the efforts could lead to mere less than two million of return filers. The broadening of tax base is expected to get a boost after data of more than 50 million individuals would be integrated into the FBR’s database.

The FBR was given a target to increase revenue collection to Rs5.5 trillion for the current fiscal year of 2019/20, up Rs1.7 trillion over the last fiscal year of 2018/19. The government planned more than Rs500 billion from new taxes in the current fiscal year.

The RTO-II, in the notices to hospitals, said it has received information that a large number of physicians and surgeons are registered with the PMDC and are thriving practice but they are not paying taxes on their incomes.

The sources said doctors registered with PMDC are required to file their annual income returns and statement of wealth under the law (section 114 of the Income Tax Ordinance, 2001).

The sources said the information received from the hospitals would be cross-matched with the withholding statements filed by the hospitals and the consultants who are not filing the returns. The tax office would later send notices to doctors for filing of income tax returns.