According to newspaper reports, the Federal Board of Revenue (FBR) has decided to issue notices to suspected tax evaders who had failed to file their income tax returns in accordance with their taxable income. Earlier, in a bid to collect Rs 15 billion additional revenue, the board had issued notices to 191000 tax evaders in the beginning of the current fiscal year. However, at least 51000 notices were returned to the board after the suspects refused to receive them.
Now the notices will be issued again through the Inland Revenue Commissioners to ensure that the suspects receive the notices and deposit the outstanding dues. Experts believe that if the notices, which were issued to broaden the tax next, are properly monitored and the amended assessment orders are issued, the board will definitely be able to collect outstanding dues at the end of the current fiscal year. There is a history of tax evasion all over the worlds, but in Pakistan’s case, tax evasion is a tradition and habit rather than felony and black sheep in the government departments are part of the system. Not only tax collection is difficult in the country, but tax payment is also difficult in some cases.
There are several areas of concerns which need concentration to stop tax leakage. The FBR has already started taking action against the companies which were reportedly involved in tax evasion when financial reports regarding sale and purchase of their shares were cross-matched with the data obtained from the National Clearing Company of Pakistan.
Meanwhile, the Directorate of Intelligence and Investigation (Inland Revenue) has started monitoring of the shares transactions after it was appeared that some shareholders were hiding the details of their real income. The board has also reportedly started a process to look into the sources of income of the investors to identify tax evaders in the stock markets. So far in the stock markets, the investors are given amnesty from declaring their sources of income.
The Security and Exchange Commission of Pakistan also opposes the declaration of the sources of investment, believing that the move will result in economic catastrophe. The government had given immunity to the investors in the stock market from disclosing their sources of income in June 30, 2014 but the capital gain tax remained intact.
The point to ponder is that how to remove trust deficit between the taxpayers and tax collectors.The system of tax collections will improve only when all the stakeholders are brought on one page.