They either didn't file returns, misinformed or hid their income
The Federal Board of Revenue has issued notices tax notices to 2.1 million people across the country, it said Sunday.
These people include those who missed the December 8, 2020 deadline for filing their income tax returns, misinformed the tax authorities, or hid their income, the FBR said in a statement.
The FBR will start penalising these people if they fail to comply with the terms of notices served to them. This may include a penalty (a minimum of Rs10,000) for missing the deadline and additional fines in case of discrepancies in the recipients’ income and wealth statements.
The exchequer may start a separate legal proceeding against these people if it suspects tax evasion. For example, when you buy a property, you have to pay taxes, and this transaction is recorded with the FBR. If they see you have a couple of plots in Bahria Town, but you have not declared them in your income tax returns or you have not even filed your tax returns, they may ask you to explain this discrepancy.
Filing income tax returns gives people a chance to explain any discrepancy in their income or wealth statement. For example, you can mention that the plot you bought was sold the same year, and you don’t have it anymore or it can be declared as property bought in someone else’s name or gifted to you by your parents. On the contrary, not declaring that property in your returns can land you in trouble.
Various government agencies as well as banks already have your personal and financial data. For example, the Pakistan Telecommunication Authority knows all the mobile numbers registered under your name and details of the expensive mobile phones that you may have bought.
The immigration service has your international travel history (yes, it knows where you spent your summer vacation last year). The National Database Registration Authority has all your personal data, including details of your family members.
Similarly, the FBR has information about your income and taxes as well as any assets, such as property, automobiles, and business, you own. The government has put all this information in one place and linked it with your CNIC number. In other words, it is creating tax profiles for citizens.
So far, it has compiled data for 53 million Pakistanis over 18 years of age. It includes both filers and non-filers and local as well as overseas Pakistanis. If you access the database, which was created in 2019, you can view your private information from your tax and CNIC numbers to property and asset details and every bit of personal information you hold dear. If something you own is missing, it doesn’t mean FBR is unaware of it because the portal is only showing partial information.
Most Pakistanis do not pay taxes in accordance with their income or do not pay any tax at all is no secret. Pakistan has one of the world’s worst tax-to-GDP ratios (the value of taxes collected as a percentage of the GDP), standing at 11%.
The International Monetary Fund (IMF) wants the government to have at least a 15% tax-to-GDP ratio to plug in the gap between its revenue and expenditure. Known as the budget deficit, this gap widened to Rs3,376 billion in the fiscal year 2020 as our expenditures were 1.5 times higher than our revenue.
The number of tax filers in Pakistan has increased to 2,623,000, according to the FBR. During the same period last year, 2,430,000 people filed their wealth statements.
The FBR seized 57% more goods as compared to the same period in the last fiscal year. It confiscated consignments worth Rs4 billion in the month of February alone.
Point-of-sale machines were installed at 9,952 major retail stores across the country, the revenue authority said.
Several shopping centres have also been linked with the FBR’s system, it added.
The FBR has warned of action against the ones not abiding by the tax laws.