ISLAMABAD: The National Accountability Bureau (NAB) has forwarded several recommendations to the Federal Board of Revenue (FBR) to plug loopholes that are believed to be the cause of massive tax evasion and other irregularities.
The recommendations were given on Tuesday by the NAB’s Prevention Committee on FBR in its first meeting, chaired by bureau’s Deputy Chairman Saeed Ahmed Sargana.
Members of the committee suggested that Automated Income Tax System in the FBR should be fully functional, so that doors of corruption and misuse of authority by the tax collectors should be stopped to increase the volume of revenue in the economy.
It also recommended that more dedicated efforts should be made to document the economy and increase the tax net.
The committee, comprising retired and serving senior taxation officers, private sector, representatives of Transparency International, the State Bank of Pakistan and other stakeholders, is mandated to focus on the loopholes of those laws, rules, regulations and procedures of taxation which are said to be misused and promote corruption.
The committee will submit its recommendations to NAB Chairman Qamar Zaman Chaudhry after its second session, to be held on March 31.
The NAB has authorised the committee to have complete access to all or any relevant document and information from any department, federal government, provincial governments, financial institutions, person or authorities as enunciated in the Section 27 of the NAB Ordinance.
On the basis of committee’s recommendations, the NAB chairman will form another committee for implementation.
According to NAB spokesman, “The committee may also refer observations of glaring corrupt practices and the incidents of corruption, to the Enforcement Division of the NAB for action.”
Recently, the NAB formed a similar committee on the revenue department of Sindh government which completed its study and gave some recommendations to the provincial government including computerisation of land and revenue record.
The FBR witnessed a tax shortfall of over Rs126 billion during the first six months of this fiscal year.
The government’s efforts to expand the tax have yet to materialise. According to FBR’s data, around 154,874 notices were issued to potential taxpayers during July 2013 and Jan 7 this year, but only 31,901 filed their returns.
In 2012, the National Database and Registration Authority (Nadra) identified more than three million potential taxpayers, who own luxury houses and have multiple bank accounts and frequently visit foreign countries, but do not pay taxes. The data was shared with the FBR and verified by the officials working for the project, but the FBR chairman recently stated that only two million tax evaders had been identified.
The government has recently cut FBR’s annual collection target by Rs119bn to Rs2.691 trillion.