Govt to launch action against 15.2 million tax evaders: Tarin

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to launch action against 7.2 million identified non-taxpayers and if the data provided by the National Database Registration Authority (Nadra) is added, this number will reach 15.2 million, a senior official said.

“Without broadening the tax base, we can’t overcome our economic problems, which we’re facing nowadays,” Federal Finance and Revenue Minister Shaukat Tarin said, while addressing at the launching of the Parliamentarians Tax Directory for 2018/19.

At present, there are only three million registered taxpayers, of which one million have registered themselves just to pay withholding and excise taxes, he said.

“In [the] real terms, there are only two million people paying taxes on their income and for broadening the tax base the number of taxpayers should be between 17 million to 18 million,” he said.

Tarin said that the FBR through the tax ray and artificial intelligence identified the evaders and the issuance of notices to them has been started from this month.

In the notices all the details of their expenditure has been mentioned and they have to show their source of income to meet this expenditure, the finance minister said, adding that the FBR will not harass them and the option of third party audit will also be provided to them.

Tarin said that to bring the GDP growth to the level of 6 per cent to 7 per cent, the tax-to-GDP ratio needs to go up by 20 per cent.

“Our tax-to-GDP ratio is hovering in [the] range of 8 per cent to 12 per cent, which is very low and can’t fulfil [the] financial needs of the country,” he added.

Tarin said that the tax distortion is the biggest hurdle in the revenue collection. The role of provinces and the federal government should be harmonised in revenue collection, he said, adding that taxes such as withholding, excise and turnover are old and outdated ways for collection.

“In a progressive tax regime, there are only two taxes; income and consumption base tax,” the finance minister said.

In Pakistan powerful segments of the society use their influence for tax evasion and the tradition of “might is right” is very much prevailing in the country.

The issuance of this directory is a good initiative and it will set a precedent that along with the Parliamentarians everyone has to declare their source of income and income tax they paid to the Federal Board of Revenue.

Earlier FBR chairman Dr Muhammad Ashfaq Ahmed in his introductory speech said that unlike previous Parliamentarians Directory of FY2019 along with the income of parliamentarians, their agriculture income has also been mentioned.

However, he said, the tax on agricultural income comes under the jurisdiction of provinces and that’s why the tax amount has not been mentioned.

The Parliamentarians Tax Directory for FY19/20 also has been finalised and soon will be presented to the Cabinet for approval.

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