FBR recovers Rs5.2bn from tax defaulters

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The business community has of late been protesting heavily against the drive which led to these recoveries. — Dawn/File
The business community has of late been protesting heavily against the drive which led to these recoveries. — Dawn/File

KARACHI: The Federal Board of Revenue (FBR) has claimed to have recovered up to Rs5.2 billion from its ongoing drive against tax defaulters, non-compliant high-net-worth individuals, besides it has acted against 4,512 bank accounts, properties, vehicles and arrested nine defaulters.

According to official data released at a press briefing in Islamabad on Wednesday, the FBR said that the drive against tax defaulters in all major cities across Pakistan “would continue in coming months especially against the tax defaulters and the persons out-of-the-tax-net.”

Giving details in a written statement issued after the briefing, the FBR said the drive was especially focused on three important areas.

“The areas are enforcement action under section 175 of Income Tax Ordinance 2001 as well as sections 38 and 40B of the Sales Tax Act 1990, which give tax officials the power to enter and search premises as well as post inspection officers on the premises to monitor sales and inventory position.”

Using these powers “the field formations have taken action against 424 cases where in revenue of Rs8.27bn was involved and out of this Rs3.282bn was recovered,” the statement said.

The other area is where large arrears were owed by taxpayers who had no stay order from any court. In this area, the statement said, nine individuals have been arrested, 4,378 bank accounts, 78 properties and 46 vehicles have been attached and one embargo was imposed.

The third area is high-net-worth individuals identified through their activity and upon whom reasonable suspicion arose of non-compliance of lack of full compliance with their tax obligation. The board identified 6,451 such cases, the statement said, and enforced 2,671 returns through the drive. It was able to create a tax demand up to Rs2.671bn through this action and recovered Rs1.372bn from them.

The business community has of late been protesting heavily against the drive saying they are being subjected to harassment by the tax officials. Most recently Federation of Pakistan Chambers of Commerce and Industry president Daroo Khan Achakzai called on the prime minister to take notice of FBR raids “without any warrant or prior notice.”

In his statement issued two weeks ago, Achakzai said such raids serve as a disincentive to enter the tax net, and run contrary to the prime minister’s stated intention to create a business-friendly environment, and create the space for abuse of discretionary powers of tax officials.

In response to these concerns, the FBR chairman appointed a focal person to deal with the business community’s complaints.

Published in Dawn, March 28th, 2019

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