LAHORE – At least 4.5 million people have been traced, who are evading tax and have not been paying a single penny to the national exchequer, including 2.5 million potential individuals, having no National Tax Number (NTN) and 1.8 million non-filers of income tax returns.

Official sources in the FBR said that there are 62,000 firms registered in Pakistan, only 22,000 of them are filing returns and just 3,000 were showing profits and paying taxes.

They said that presently, 1.62 million individuals have been identified who are frequent foreign travelers, 585,000 persons having multiple bank accounts, 56,455 people living in posh localities, 19,155 owning luxury vehicles, 65,736 people paying more than Rs100,000 per month utility bills, 14,000 rich persons having prohibited and non-prohibited bore arms licences and move along with large convoy of vehicles, 26,000 service providers, including doctors, engineers and other professionals.

There were 3.5 million NTN holders and only 1.5 million had filed their income tax returns or statements and 1.8 million were non-filers. In case, the FBR was able to enforce filing of returns by these non-filers, the number of return filers could cross over 4.3 million.

Experts have suggested the FBR to issue notices under sections 114 and 116 of the Income Tax Ordinance, 2001 for filing of income tax return along with wealth statement. In case of non-compliance, provisional assessment under section 122C of the Income Tax Ordinance 2001 should be completed. Besides this penalty or prosecution proceedings for the default of non-compliance of notices u/s 114 and 116 should also be initiated. They said that in case of non-compliance, tax dodger’s assets, including their vehicles should be put on auction for recovery of tax.

Criticising the amnesty schemes, they said that parliament instead of entertaining an amnesty scheme should seriously consider introducing ‘asset-seizure scheme’ to confiscate undeclared assets created from undisclosed money and make laws to bring back looted money from tax dodgers.

They said that the government should find out how this black money was generated in the first place when there are so many employees getting their salaries out of taxes collected from public money. The survey of markets, educational institutions, private hospitals, hotels and businesses etc would be instrumental in tracing the un-documented individuals.

They said that the amnesty schemes introduced by the FBR in the past failed to yield positive results. A scheme was launched during the Musharraf regime in 2000-01, and the FBR collected only Rs10 billion. Another scheme which was launched in 2008 fetched just Rs2.5 billion.

The amnesty and whitening schemes not only discourage honest taxpayers, but also cause huge revenue loss to the national exchequer, they added.