Karachi, August 20, 2023 – The Federal Board of Revenue (FBR) has taken a significant step towards promoting tax transparency and accountability by prescribing penalties for the concealment of income.
In an effort to curb tax evasion, the FBR has introduced an updated version of the Income Tax Ordinance, 2001, which will be in effect for the tax year 2023-24.
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Under the new ordinance, individuals found guilty of concealing income or providing inaccurate details related to their income will face strict penalties. This includes instances of suppressing income or failing to report taxable amounts, making false claims for deductions not actually incurred, or engaging in any act outlined in subsection (1) of section 111 of the ordinance during any proceedings with Income Tax authorities or the appellate tribunal.
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According to the updated regulations, individuals caught in such actions will be liable to pay a penalty of either one hundred thousand rupees or an amount equal to the tax they sought to evade, depending on which is higher. However, it’s important to note that penalties will not be imposed solely for the disallowance of tax exemptions or deductions declared by individuals, unless it can be proven that the individual knowingly made false claims.
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This move by the FBR signifies a strong commitment to combat tax evasion and promote fiscal transparency in Pakistan. It aims to create a fair and equitable tax system where all citizens contribute their due share to the country’s development.
The updated Income Tax Ordinance, 2001, with its stringent penalties for income concealment, is expected to serve as a deterrent for tax evaders and encourage taxpayers to report their income accurately and honestly. It reinforces the FBR’s ongoing efforts to increase tax compliance and revenue collection, which in turn will contribute to the economic growth and prosperity of Pakistan.
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Taxpayers and financial advisors are urged to familiarize themselves with the revised ordinance to ensure compliance with the new regulations. Failure to do so may result in severe penalties, as prescribed by the FBR, for any attempt to conceal income or provide inaccurate financial information.
The FBR remains committed to assisting taxpayers in understanding their obligations and providing guidance on tax matters to foster a culture of tax compliance and accountability in the country.
