Karachi, April 11, 2024 – The Federal Board of Revenue (FBR) will publicly disclose a list of non-filers and take stringent measures, including the blocking of phone, electricity, and gas connections, as part of its crackdown on tax evasion.
Sources within the FBR revealed that prior to implementing any harsh actions, the FBR will issue an Income Tax General Order in accordance with the Income Tax Ordinance, 2001. This order will specifically identify individuals engaging in substantial transactions but failing to declare their income and assets.
The FBR is currently finalizing the income tax general order, which is expected to include the names of hundreds of thousands of non-filers who have evaded their tax obligations.
The addition of a new section, 114B, to the Income Tax Ordinance, 2001 through the Finance Act, 2022, empowers the FBR to enforce tax filing by blocking utility connections. However, despite its introduction two years ago, the FBR has made little progress in implementing this provision until now.
According to Section 114B of the Income Tax Ordinance, 2001:
• The FBR has the authority to issue an income tax general order for individuals not listed as active taxpayers but are legally obligated to file returns.
• The consequences outlined in the general order may include the disabling of mobile phones or SIM cards, discontinuation of electricity, or gas connections.
• The restoration of these connections may be ordered by the Board or the relevant Commissioner if it is demonstrated that the individual has filed their return or was not obligated to do so under the law.
• No individual can be included in the general order unless specific conditions are met, including the issuance of a notice and non-compliance with the requirement to file a return.
However, it’s important to note that certain categories of individuals are exempted from filing income tax returns under Section 115 of the Income Tax Ordinance, 2001. This includes widows, orphans under the age of twenty-five, disabled individuals, and non-resident property owners.
As such, the FBR will not take action to block phone and power connections in cases of non-compliance within these exempted categories.
The FBR’s move to tighten enforcement measures underscores the government’s commitment to combating tax evasion and ensuring compliance with tax laws. It also sends a clear message to non-filers that they will face serious consequences for failing to fulfill their tax obligations.
