The Federal Board of Revenue (FBR) in Pakistan has been granted enhanced authority to access third party information and databases in real-time as part of a comprehensive strategy to identify new taxpayers and curb tax evasion.
The move comes after the introduction of new provisions in the Finance Bill of 2020, amending the Income Tax Ordinance, 2001, and the Sales Tax Act, 1990.
The Finance Bill has outlined specific arrangements for real-time access to information and databases from various entities, including government agencies and private organizations. Notably, the National Database and Registration Authority (NADRA) will provide access to information related to National Identity Cards, Pakistan Origin Cards, Overseas Identity Cards, Alien Registration Cards, and other particulars contained in the Citizen Database.
Additionally, the Federal Investigation Agency and the Bureau of Emigration and Overseas Employment will share details of international entry and exit of individuals, along with information regarding work permits, employment visas, and immigration visas. The Islamabad Capital Territory and provincial and local land record and development authorities will provide land-related records, and the Excise and Taxation Departments will offer information on vehicle registration and ownership transfers.
Furthermore, electricity suppliers and gas transmission and distribution companies are mandated to share consumer particulars, units consumed, and billing information. The provisions also require these companies to allow consumers to update the connection-sharing ratio or user details by January 1, 2021.
The Finance Bill also empowers the FBR to receive information from any other agency, authority, institution, or organization notified by the Board, broadening the scope of data available for tax enforcement.
The FBR is tasked with establishing the necessary infrastructure for real-time access to information and aligning it with its own database. This initiative aims to strengthen the FBR’s capabilities in identifying potential taxpayers, preventing tax evasion, and ensuring a more transparent and effective tax collection system.
Until real-time access is fully operational, the Finance Bill allows for the periodic provision of information and data in the prescribed form and manner. This transitional measure ensures that the FBR has access to relevant information even before the comprehensive real-time system is fully implemented.
The move to empower the FBR with real-time access to third-party information is a significant step in the government’s ongoing efforts to improve tax compliance, enhance transparency, and boost revenue collection. By leveraging advanced technology and cooperation with various entities, Pakistan aims to create a more robust and efficient tax administration system that aligns with international best practices in combating tax evasion.
