Government Proposes Amendments to Tax Laws to Curb Tax Evasion and Meet Targets

In a bid to tighten the noose around tax evaders and meet the national tax collection targets, the government has proposed amendments to the tax laws. These amendments are currently under discussion in the National Assembly’s Finance Committee. The Federal Board of Revenue (FBR) has recommended using banking transactions as a tool to track tax evaders. According to the proposal, individuals whose banking transactions exceed their declared income will be closely monitored by the FBR.

Chairman FBR, Rashid Langrial, informed the committee that in the past, people have declared assets worth one crore, while conducting banking transactions of 15 to 20 crores. Under the proposed amendments, the FBR will take immediate action against individuals whose banking transactions exceed their declared income. The FBR plans to collaborate with banks for this purpose.

Langrial further explained that banks will be instructed to share data on taxpayers’ income and turnover. If the volume of a person’s transactions does not align with the income declared in their tax return, the bank will be required to report it to the FBR. The banks will be mandated to report any transaction exceeding the declared income on the tax return.

Furthermore, the Chairman of the FBR emphasized that while banks will not be instructed to block transactions, they will be required to report such activities to the FBR. The FBR also intends to develop an algorithm with banks to efficiently track and match transactions.

Member of the Committee, Bilal Azhar Kiani, mentioned that the amendment bill also includes a provision allowing non-filers to purchase property for the first time, while individuals who have declared their income in tax returns will be allowed to buy new properties. Additionally, property can be purchased by parents and children, and the purchase can be made based on cash or equivalent assets.

In response to a question from the committee, Chairman FBR also revealed that the purchase of 1,010 new vehicles for FBR officers has been halted. A final decision on the vehicle procurement will be made in light of the committee’s decision, and once the minutes of the Senate’s Finance Committee are received, the matter will be addressed. Until then, the decision regarding vehicle purchases will be postponed.