Return filing be made mandatory for account holders

Return filing be made mandatory for account holders

KARACHI: The Federal Board of Revenue (FBR) has been urged to made mandatory the filing of income tax return for account holders having turnover Rs2 million or above during a year.

Overseas Investors Chamber of Commerce and Industry (OICCI) in its recommendations for budget 2022/2023, advised that FBR and State Bank of Pakistan (SBP) should devise a framework to ensure all customers of financial institutions whose account shows turnover in excess of Rs2 million or more during the year, have filed a tax return and wealth statement.

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“This could be done by the financial institutions simply notifying names/CNIC numbers of such customers to FBR without giving access to bank accounts,” it added.

The OICCI in its proposals for broadening the tax base, said the tax authorities should use technology, data analytics including Artificial Intelligence tools and make better/effective utilization of NADRA database and other documented sources to ensure that all income earners are NTN holders and “filers”, with submission of annual income tax/wealth returns and wealth reconciliation statements.

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Art exhibition halls, hospitals where doctors practice, hotels and other public places holding large receptions for fashion houses & designers, sale of branded/designer dresses, airlines, travel agencies, etc. should provide names and addresses of the respective persons involved in these business activities to the FBR on a quarterly basis.

Once the FBR receives the above information, it should be pro-active and pursue potential taxpayers by sending them income tax return forms requiring them to file tax returns – rather than waiting for the tax returns to be filed.

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The OICCI strongly recommended to eliminate culture of amnesty schemes as it discourages the honest taxpayers.

As Pakistan is a signatory to the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, which became operational from September 2018, regular coordination should be done with relevant authorities of countries, considered as tax heavens for stashing away illegal wealth, for information sharing, and cases of proven tax evasion publicly shared.

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Appropriate laws should be made to enable the government to seize local assets, in equivalent value, or levy appropriate taxes, if any person holds any kind of assets outside the country for which source of income could not be established.