ISLAMABAD  -   The Federal Board of Revenue (FBR), which as its chairman admitted lacks transparency, deputed its teams at mega chain stores in three major cities of the country in order to detect multi-billion tax evasions.

FBR Chairman Muhammed Jehanzeb Khan informed the National Assembly Standing Committee on Finance and Revenue that government is working to broaden the tax base of the country by bringing non-taxpayers into tax net. The FBR had so far issued notices to around 6500 non-taxpayers in the country and now the process of recovery of taxes from them is underway. He disclosed that FBR has identified commercial plazas and shopping malls in three mega cities including Karachi, Lahore and Islamabad to broaden tax base of the country. The FBR has also been obtaining data of sale receipts from 2,500 retail stores electronically all over the country.

The Standing Committee on Finance, Revenue and Economic Affairs of the National Assembly was held under the chairmanship of Faiz Ullah, MNA. The FBR chairman also informed the committee that FBR has also obtained bank accounts details of around 150,000 non-resident Pakistanis. The FBR is working on it by issuing notices to these non-resident Pakistanis. He further said that FBR would also start receiving information about Pakistanis who have bank accounts in Switzerland.  The FBR has placed the revised Convention on Avoidance of Double Taxation with Switzerland, enabling both sides for access of information on banking and financial details. Furthermore, the government is also receiving information about Pakistanis who had purchased properties in UK and UAE, he added.

The committee was informed that FBR is also working to bring housing societies into tax net. The officials of FBR informed that housing societies are charging full tax from the consumers but they are paying lesser taxes to the government. The FBR had raided several housing societies recently.

He also admitted that there is lack of transparency in FBR. However, the incumbent government had taken several measures to bring reforms in the tax department.  The government with the help of World Bank is working to prepare Transformation Programme for the FBR. Meanwhile, the government had also established Tax Policy Unit to improve the working of the FBR, he added.

 Chairman FBR informed that they had achieved 92 percent of the tax collection target during first seven months of the current fiscal year. The FBR had faced revenue shortfall of Rs172 billion during July to January period of the ongoing fiscal year.

The Committee Members expressed their concern about the short fall of revenue and directed the Chairman FBR to focus the direct tax policy instead of indirect taxes.

Chairman, FBR enlightened that tax evasion has been reduced and number of filers increased upto 32%. He said that filing of income tax returns had improved during the seven months of the year 2018-19. As many as 3,59, 694 individuals had filed their returns during July-January period of the current fiscal year that are 32 percent higher than the same period of the previous year. Meanwhile, 10366 associations of persons and 7467 companies had filed their income tax returns. Overall, 3, 77,527 returns had filed during July to January period of the year 2018-19. The FBR was informed that tax refunds are around Rs160 billion.

The Committee decided to invite the stakeholders from real estate sector to discuss the issues being faced by the said sector due to difference in valuation table of the FBR and DC rates etc. While discussing the tax policy regarding import of vehicles, the Committee Members have shown their concern on the extra prices charged in shape of (On money) in the market and late delivery of vehicles by the local manufacturer/assembler. The Committee decided to invite the Secretaries, Ministry of Commerce, Industries & Production and stakeholders from automobile sector in its meeting.    

The Committee ratified the nominees of the policy board of Federal Board of Revenue (FBR) as required under section 6 (six) of the Federal Board of Revenue Act, 2007. The Committee Members were informed by Mr. Faiz Ullah, MNA/Chairman of the said Committee that the nomination of Mr. Muhammad Hammad Azhar, Minister of State for Revenue was made by the Honorable Speaker according to the power vested under the Act. However, the PML-N had opposed the decision by saying government could nominate Minister for the aforesaid Policy Board.

The Chairman, Federal Board of Revenue (FBR) briefed the Committee on the working and functioning of the Revenue Division. He said that FBR was established under section 3 of the FBR Act, 2007 and drives its powers and function to achieve the objectives and purposes under section 4 of the said Act. He informed the Committee about the composition of policy Board, which provides guidance in matters relating to the vision, mission, values of the Board and gives policy guidelines in framing fiscal policy & objectives. While briefing about the organizational structure of the Board, he told the Committee that FBR was headed by Chairperson and supported by Members and Director Generals in administration of federal taxes. He added that FBR was organized along functional lines, namely Inland Revenue, Customs and support functions etc. He apprised the Committee about the measures taken by the government with regard to address the key challenges and impediments. He said that since September 2018, FBR has taken a number of initiatives for preparing comprehensive transformation plan, which will improve its performance and service delivery.