PTBP Web Desk
The Federal Board of Revenue (FBR) of Pakistan, under the directive of Prime Minister Shehbaz Sharif, has meticulously planned and is now ready to execute an enforcement action against non-filers and nil-filers who fall under the category of high-net-worth individuals.
This initiative not only seeks to widen the tax net but also aims to address the long-standing issue of tax evasion among the affluent in Pakistan.
The primary focus is on individuals who have not only failed to file their taxes but also those who have declared zero income or have concealed their income and assets. This group includes those with significant lifestyle indicators of wealth, such as ownership of multiple luxury vehicles, substantial bank profits, high credit card expenditures, and enrollment of children in elite private schools.
Field formations, after receiving approval from the FBR chairman, will dispatch notices. The first wave in this enforcement plan targets 5,000 individuals, with an estimated collective tax liability of Rs7 billion.
The FBR has set up a dedicated dashboard to monitor these notices, ensuring follow-through and compliance.
The selection was based on an internal analysis involving a desk audit of transaction data for around 200,000 non-filers.
High-net-worth individuals were identified by criteria such as owning at least three cars, having bank account profits exceeding Rs100 million, monthly credit card bills over Rs200,000, and private schooling for their children.
The combined net worth of the targeted 5,000 individuals is estimated to be between Rs26 to Rs27 billion.
The action is expected to recover approximately Rs7 billion in tax revenue, which translates to an average of Rs1.4 million per person in income tax, given their average net worth of Rs5.4 million.
By targeting the wealthy who evade taxes, the FBR aims to create a more equitable tax environment where everyone contributes according to their means, thereby reducing the tax burden on the middle and lower classes.
This initiative sends a strong message about the government’s commitment to improving tax compliance, potentially deterring future evasion.
The revenue from this enforcement, if successful, could significantly contribute to the national exchequer, aiding in funding public services, infrastructure, and fiscal stability.
There might be legal challenges regarding privacy and the methods used to gather financial data.
While some may view this as a necessary step towards fairness, others might see it as an overreach by the government, potentially affecting public trust.
Ensuring that the enforcement is carried out efficiently without undue harassment or corruption at the field level will be crucial for the plan’s success.
