In a stern announcement, the Federal Board of Revenue (FBR) has issued a warning to non-filers of income tax returns, outlining severe consequences, including the suspension of bank accounts and travel bans on both local motorways and international air travel. The move aims to bolster the tax base and address the critical fiscal challenges faced by Pakistan.
Chief of Broadening the Tax Base Delivers the Message
Muhammad Asif, Chief of Broadening the Tax Base (BTB), emphasized the urgency for non-filers to register with the nearest tax office to evade penalties, fines, utility disconnection, and the extreme measure of restricting their movement both within the country and abroad. The warning, as delivered by Asif, is part of the broader initiative to strengthen Pakistan’s financial foundation.
The Challenge of a Narrow Tax Base
Pakistan, with a population of 240 million, grapples with a meager tax base of approximately 5.2 million individuals registered in the tax system and filing returns in 2022. The nation faces the pressing need to combat widespread tax evasion, coupled with a low tax-to-GDP ratio, posing a significant impediment to revenue generation for crucial public services and socio-economic development projects.
FBR’s National Drive on Broadening the Tax Base
To address these challenges, the FBR has launched a nationwide drive on Broadening the Tax Base, targeting eligible individuals and those earning taxable income. The objective is to encourage registration with the tax system and the timely filing of income returns. The Chief BTB anticipates the addition of 1.5 million new taxpayers during the current year.
Data Acquisition for Enhanced Compliance
The FBR, utilizing third-party data acquisition, has compiled information on hundreds of thousands of financial transactions of individuals not yet within the tax net. This data is accessible on the FBR’s website under “MALOMAAT.” Director BTB asserts that the FBR possesses data on virtually all eligible individuals, and non-compliance will lead to their inclusion in the tax net in the coming weeks.
Urgent Call to Action
The FBR’s warning concludes with a call to action, urging non-filers to take advantage of the available time, visit their nearest tax office, and register to avert penalties, fines, utility disconnection, and travel restrictions. The emphasis on this initiative underscores the gravity of the situation and the FBR’s commitment to expanding the tax base for the economic well-being of the nation.
In summary, the FBR’s bold stance against non-compliance seeks to reshape Pakistan’s fiscal landscape, ensuring broader tax participation and a more robust financial foundation.