ISLAMABAD: The Federal Board of Revenue (FBR) has taken a number of measures to check tax evasion, especially the income tax evasion.
A brief of measures introduced by the FBR presented before the National Assembly Standing Committee on Finance and available with Customs Today states that a National Data Warehouse has been created in the FBR which primarily includes the data collected through third party sources.
These sources include motor vehicle registering authorities, educational institutions, property registrars offices, development authorities, housing societies, electricity distribution companies, automobile manufacturing companies and the withholding tax statements.
“Based on this data base notices are being issued” the document says that the system is monitored by the Directorate of Broadening of Tax Base (BTB) of FBR with the help of field formations. The data declared in the withholding tax statement and sales tax return is analyzed to identify person who carryout financial transactions but are not on tax rolls.
Appropriate action in respect of such persons is initiated in accordance with relevant provisions of law. To timely detect and take appropriate legal actions against tax evaders automated systems have been developed and used such as Computerized Risk Based Evaluation of Sales Tax (CREST).
The document further relates that to broaden the tax base, a new regime wherein different rates of adjustable withholding of Income Tax for income tax returns filers and non filers on certain transactions have been introduced.
The higher rates of tax for non filers will not only prod non filers to file returns and declare their income from all sources, but also provide a database to FBR for identification of potential taxpayers to be pursued for broadening of tax base.
Another measure is that FBR Directorate General of Intelligence & Investigation is exclusively perusing cases of tax fraud and evasion. This directorate gathers information on tax related issues and investigates tax and fiscal frauds and this Directorate recommends appropriate action where ever required.
Moreover, to control tax evasion various penal provisions are in place under Income Tax Ordinance, 2001, which include fine of Rs.25,000/- or 100% of the amount of tax shortfall (whichever is higher) applies for making false or misleading statements, inaccurate particulars of income, and concealment.
Further, tax evasion is an offence punishable on conviction with a fine or imprisonment for a term not exceeding one year, or both under section 191 of the Ordinance. – Section 192A, provides for prosecution for concealment of income. Such an offence will attract imprisonment up to 2 years, or five, or both.
