FBR will use strong authority in a fresh effort to broaden its tax base

FBR will use strong authority to broaden its tax base

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 caretaker federal government has established 145 District Tax Officers (DTOs) across the nation in an effort to attract 1.5 to 2 million new taxpayers.

The Income Tax Law has given the Federal Board of Revenue (FBR) broad authority to suspend utility connections, such as gas and electricity, and to disable mobile SIM cards in the event that a return is not filed in response to notices sent out.

In the most recent fiscal year, there were only about 4.9 million return filers out of a total population of 240 million. There is a good chance to identify prospective non-filers or tax evaders in order to increase the size of the tax base, as there are approximately two million return filers who submitted zero returns.

In an effort to increase the tax base and eventually raise the tax-to-GDP ratio to the targeted level, the FBR on Friday contacted the offices of 145 DTOs. Through the enforcement of Income Tax Returns from non-filers and stop filers, the DTOs would concentrate on bringing 1.5 to 2 million additional taxpayers into the tax system until June 2024.

The BPS-17/18 Inland Revenue Officers would be the DTOs. They would procure and employ third-party data obtained from various departments and agencies that contain vital information about asset investments and significant expenses incurred by prospective taxpayers who have so far avoided the tax system, including filing tax returns and registering.

Invoking the recently enacted Income Tax Ordinance 2001 Section 114B, which permits the department to cut off utility connections—including gas and electricity—and block mobile SIM cards in the event that a return is not filed in response to notices issued, is one of the instruments to be used for this purpose. In order to require different departments and agencies to send data to the FBR via an automated common transmission system, a new Documentation Law is also being introduced.