Karachi, December 6, 2023 – The Federal Board of Revenue (FBR) will gain access to the online system of the Pakistan Stock Exchange (PSX) for broadening of tax base.
This development will come after the approval of SRO 1771(I)/2023, marking a crucial step in identifying potential taxpayers engaged in share trading activities but currently outside the tax net.
Official sources revealed on Wednesday that the FBR’s access to the PSX online system will empower tax authorities to scrutinize individuals profiting from share trading and ensure their compliance with tax regulations. The move aligns with the government’s commitment to enhancing transparency and accountability in financial transactions.
The FBR had issued a notification a day earlier, inviting input from stakeholders within a seven-day period before the finalization of SRO 1771(I)/2023. This inclusive approach underscores the government’s commitment to engaging relevant parties and considering diverse perspectives in the implementation of fiscal policies.
The PSX has experienced significant growth in recent months, reflecting the growing interest of investors in leveraging the stock market for potentially lucrative returns. The integration of the FBR with the PSX online system is expected to provide tax authorities with valuable insights into financial activities within the stock exchange, enabling them to identify untapped revenue streams.
As part of its broader strategy, the FBR will gain online access to databases maintained by both government and private entities to detect new taxpayers. This initiative aims to create a comprehensive network for real-time data analysis, further enhancing the FBR’s capabilities in monitoring economic transactions.
Every integrated organization is mandated to integrate with the FBR’s real-time accessed data analysis repository (RADAR) no later than January 15, 2024, or any date notified for integration. This integration is designed to facilitate real-time access to information and databases pertaining to economic transactions conducted by individuals with or reported to the integrated organization.
In addition to the PSX, the FBR will also gain real-time access to the databases of the National Clearing Company of Pakistan Limited (NCCPL) and the Central Depository Company (CDC). This move is expected to provide a more comprehensive view of financial activities within the stock business, allowing the FBR to identify potential taxpayers who may have thus far evaded scrutiny.
The integration of the FBR with key financial institutions reflects the government’s commitment to employing technology and data analytics to streamline tax enforcement efforts. By leveraging real-time access to financial data, the FBR aims to ensure that all individuals engaged in economic activities contribute their fair share to the national tax revenue, fostering economic sustainability and equitable fiscal policies.
