ISLAMABAD: The Federal Board of Revenue (FBR) is gearing up to launch an Income Tax General Order aimed at identifying and penalizing non-filers who possess taxable income but have failed to file their income tax returns.
According to sources within the FBR, the upcoming Income Tax General Order will feature the names of individuals who, despite having taxable income, have neglected their duty to file income tax returns. These individuals will face stringent penalties imposed by tax authorities, including the denial of various essential utilities.
The FBR, in its efforts to compile the names of non-filers, has obtained extensive data on large transactions made by such individuals. This data confirms that these individuals possess significant income and assets yet deliberately evade their national responsibility of filing tax returns.
The forthcoming Income Tax General Order is expected to list hundreds of thousands of non-filers who have shirked their tax obligations. Through this order, the FBR intends to transmit these names to relevant utility providers, thereby prompting the suspension of services such as phone connections, electricity, and gas.
The introduction of Section 114B to the Income Tax Ordinance, 2001, via the Finance Act, 2022, has empowered the FBR to enforce tax filing compliance by blocking utility connections. Despite its incorporation two years ago, the implementation of this provision has been sluggish until now.
As per Section 114B of the Income Tax Ordinance, 2001:
• The FBR possesses the authority to issue an Income Tax General Order targeting individuals not classified as active taxpayers but legally obligated to file returns.
• Consequences outlined in the general order may encompass the deactivation of mobile phones or SIM cards, discontinuation of electricity or gas connections.
• Restoration of these connections may be permitted upon filing of the return or demonstration of non-obligation under the law, subject to the decision of the Board or relevant Commissioner.
• Inclusion in the general order necessitates specific conditions to be met, including the issuance of a notice and failure to comply with return filing requirements.
However, it’s imperative to recognize that certain categories of individuals are exempt from filing income tax returns under Section 115 of the Income Tax Ordinance, 2001. This includes widows, orphans below the age of twenty-five, disabled individuals, and non-resident property owners. Consequently, the FBR will refrain from blocking phone and power connections for individuals falling within these exempted categories.
The FBR’s proactive measures to enhance enforcement highlight the government’s steadfast commitment to combating tax evasion and ensuring adherence to tax laws. This initiative sends a clear message to non-filers that they will encounter severe repercussions for neglecting their tax obligations.
As the FBR prepares to implement the Income Tax General Order, it underscores a pivotal step towards fostering a culture of tax compliance and revenue transparency within the country’s fiscal framework.
