Mohsin Siddiqui (Chief Reporter)
The amended Finance Bill 2024 has introduced stringent measures to combat tax fraud, imposing severe penalties and extended imprisonment for offenders. According to the new provisions, individuals involved in tax fraud can face imprisonment for up to five years if the evaded amount is less than Rs 1 billion, and up to ten years if the evaded amount is Rs 1 billion or more.
The Finance Bill 2024 specifies that any person who commits, causes to commit, or attempts to commit tax fraud will be subjected to a penalty of Rs 25,000 or 100 percent of the amount of tax evaded or sought to be evaded, whichever is higher. This ensures that the financial penalty is substantial enough to deter potential fraudsters from engaging in such activities.
The financial penalties, the bill outlines strict imprisonment terms for convicted individuals. A special judge, upon conviction, can sentence an offender to imprisonment for a term that may extend to five years if the tax evaded or sought to be evaded is less than Rs 1 billion. For cases where the evaded tax amount is Rs 1 billion or more, the imprisonment term can extend to ten years. Furthermore, the convicted individual may also face a fine that can equal the amount of tax evaded or sought to be evaded, or both imprisonment and fine.
The Finance Bill also addresses the issue of abetment and connivance in tax fraud. Individuals who assist or conspire with others to commit tax fraud are subject to the same severe penalties. Upon conviction by a special judge, these individuals can face imprisonment for up to five years if the tax evaded or sought to be evaded is less than Rs 1 billion, and up to ten years if the tax amount is Rs 1 billion or more. Additionally, they may be fined an amount equal to the tax evaded or sought to be evaded, or face both imprisonment and a fine.
The introduction of these stringent measures highlights the government’s commitment to curbing tax evasion and enhancing the integrity of the tax system. By imposing hefty fines and long-term imprisonment, the government aims to create a strong deterrent against tax fraud, ensuring greater compliance and transparency within the tax framework.
The Finance Bill 2024 reflects a broader effort to strengthen fiscal discipline and improve revenue collection. By targeting tax fraud with severe penalties, the government is signaling its zero-tolerance approach towards financial misconduct. This move is expected to not only deter potential offenders but also encourage honest taxpayers to comply with tax laws.
The impact of these measures on the economy could be significant. By reducing tax evasion, the government can increase its revenue base, allowing for more funds to be allocated towards essential public services and infrastructure development. This, in turn, can contribute to sustainable economic growth and development.
For taxpayers, the amended Finance Bill 2024 serves as a crucial reminder of the importance of compliance. Individuals and businesses must ensure accurate reporting of their income and timely payment of taxes to avoid facing the severe consequences outlined in the bill. It also underscores the need for robust internal controls and auditing processes to prevent any inadvertent or deliberate tax evasion activities.
