ISLAMABAD: National Database and Registration Authority (NADRA) has been empowered to compute indicative income and tax liability of persons using artificial intelligence and other modes.
The powers have been given under Tax Laws (Third Amendment) Ordinance, 2021 promulgated on Friday.
Through the Tax Laws, a new section 175B has been inserted to Income Tax Ordinance, 2001 to authorized NADRA to take measures for broadening of tax base.
Following is the text of Section 175B of the Income Tax Ordinance, 2001:
175B. The National Database and Registration Authority (NADRA).
(1)The National Database and Registration Authority shall, on its own motion or upon application by the Board, share its records and any information available or held by it, with the Board, for broadening of the tax base or carrying out the purposes of this Ordinance.
(2) The National Database and Registration Authority may—
(i) submit proposals and information to the Board [Federal Board of Revenue] with a view to broadening the tax base;
(ii) identify in relation to any person, whether a taxpayer or not –
(a) income, receipts, assets, properties, liabilities, expenditures, or transactions that have escaped assessment or are under-assessed or have been assessed at a low rate, or have been subjected to excessive relief or refund or have been misdeclared or misclassified under a particular head of income or otherwise;
(b) the value of anything mentioned in sub-clause (a) of clause (ii), if such value is at variance with the value notified by the Board or the district authorities, as the case may be, or if no such value has been notified the true or market value; and
(iii) enter into a memorandum of understanding with the Board for a secure exchange and utilization of a person’s information.
(3) The Board [FBR]may use and utilize any information communicated to it by the National Database and Registration Authority and forward such information to an income tax authority having jurisdiction in relation to the subject matter regarding the information, who may utilize the information for the purposes of this Ordinance.
(4) The National Database and Registration Authority may compute indicative income and tax liability of anyone mentioned under sub-sections (1) or (2) by use of artificial intelligence, mathematical or statistical modeling or any other modern device or calculation method.
(5) The indicative income and tax liability computed by the National Database and Registration Authority under sub-section (4) shall be notified by the Board to the person in respect of whom such indicative income and tax liability has been determined, who shall have the option to pay the determined amount on such terms, conditions, installments, discounts, reprieves pertaining to penalty and default surcharge, and time limits that may be prescribed by the Board.
(6) In case the person against whom a liability has been determined under sub-section (4), does not pay such liability within the time prescribed under sub-section (5), the Board shall take action under this Ordinance, upon the basis of tax liability computed under sub-section (4).
(7) If the person against whom the liability has been determined under sub-section (4) pays such liability in terms of sub-section (5), such payment shall be construed to be an amended assessment order under section 120 or sub-section (1) of section 122 or sub-section (4) of section 122 as the case may be.
(8) For the purposes of sub-sections (4) and (5), the Board may prescribe the extent of installments, reprieves pertaining to penalty and default surcharge and time limits.
