PM directs FBR to tighten noose around big tax dodgers

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ISLAMABAD: Prime Minister Imran Khan on Tuesday ordered the Federal Board of Revenue (FBR) to flex its muscles against big tax evaders and make them cough nearly Rs200 billion in the next four months amid his annoyance over the poor show of the tax machinery.

The PM also directed to present a new Whistleblowers Bill next month to reward people who help nab corrupt officials and politicians. He also ordered the FBR to immediately activate the Directorate General of Immovable Properties to confiscate those assets that are declared below their market values.

He asked the FBR to launch a full scale campaign that should target only those people who enjoy lavish lifestyles but are not in the tax net. Khan passed these directions in a meeting with his economic team.

This was the PM’s second meeting on tax issues in past two weeks but like the last time he was again disappointed with the extremely poor performance of the FBR

The FBR informed the PM that it has already recovered Rs11.9 billion from tax evaders and expects that the figure would touch Rs25 billion soon. However, the PM was visibly disturbed due to poor performance of the FBR during the past six months, according to an official who attended the meeting.

The FBR has not only failed to achieve its monthly revenue collection targets but is also struggling to broaden the tax base. The Pakistan Tehreek-e-Insaf (PTI) has come to power on an anti-corruption reformist agenda, also promising to double the country’s tax collection to Rs8 trillion – a journey that it has not even begun despite spending six months in the government.

The PM assured the FBR that there would be no political intervention in its working. Khan is said to have told the FBR chief that if he did not intervene in the case of his sister, then nobody should expect any kind of favour, another participant of the meeting told The Express Tribune.

Realising the poor human resources at the FBR, PM Khan allowed the FBR to engage people from the private sector to nab the tax evaders and achieve its targets, the Federal Minister for Information Fawad Chaudhry told The Express Tribune. Chaudhry was also present in the meeting.

The minister said the PM asked the FBR to make sure that people are not harassed and the existing taxpayers are not overburdened during the campaign against the tax evasion. Instead, the FBR has been asked to broaden its tax base.

Khan also asked the FBR to catch its own corrupt officials who help people evade taxes, according to a handout issued by the PM’s Office after the meeting.

“The PM has ordered the FBR to launch from next week a massive campaign against tax avoidance and evasion,” said the FBR’s Member Inland Revenue Policy Dr Hamid Ateeq Sarwar. “The PM also directed that the FBR should go after those people who have lavish lifestyles but remain outside the tax net.”

The FBR informed the PM that it faced Rs192 billion shortfalls in tax collection, which the PM directed to meet by going after the tax evaders. The government had earlier planned to levy new taxes to bridge the shortfall but the plan was dropped due to a delay in finalisation of IMF programme.

The FBR gave a presentation on the gains that it has so far made in campaign against tax evasion. The PM was told that the FBR has so far recovered Rs11.9 billion and hoped that the figure would touch Rs25 billion, according to the PM’s Office. The recoveries were made from high net worth individuals, people owning undeclared offshore assets and through an audit tax amnesty scheme.

Dr Sarwar said Rs25 billion recoveries were made under a pilot project and now the FBR would start sharing the information about the tax evaders in bulk with the field formations to take actions against these people.

The FBR would now prepare a mechanism to send notices only to those who remain outside the net. All such campaigns in past failed to yield desired results due to fragmentation of powers between various wings of the FBR.

The FBR will now consolidate these powers and give specific jobs to its Broadening of Tax Base wing and Directorate of Intelligence & Investigation wing.

It was decided that the FBR will focus on offshore tax evasion cases, high net worth individuals, use domestic banking information and will go after those who hold Benami assets. The FBR will trigger the Directorate General Immovable Properties against those who understate value of their assets.

The Directorate General of Immovable Properties had been setup by former prime minister Shahid Khaqan Abbasi to regulate the realty sector, which is key source of tax evasion.

It was also decided to present a new Whistleblowers Bill before the parliament and seek bipartisan support for its approval. Few months back, Law Minister Farogh Naseem had said any person who shares information about alleged corruption would be given 20% of the recovered amount as a reward.

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