Broadening tax base: Nadra data to be employed to carry out '360-degree' analysis

Minister of State for Revenue Muhammad Hammad Azhar Thursday said the actionable data of National Database & Registration Authority (Nadra) would be used to carry out a '360-degree' analysis of the non-filers for bringing them into the tax net. He was addressing the ceremony on selection of 14,000 cases for audit through computerised balloting here at the FBR House on Thursday.
He said that the FBR is in the process of acquiring data of 3-4 hundred thousands non-filers from Nadra for taking necessary action against them.
Now, the FBR has already acquired overwhelming data which would be used for broadening the tax base. The FBR has decided to carry out a 360-degree analysis of the non-filers with the help of actionable data available with the Nadra. A 360-degree view would be taken of non-filers including their lifestyle, expenditures, foreign travels, purchase of properties and other data. By the end of this month, the FBR will roll out this exercise.
He said, "This year we increased data parameters for more targeted selection and number of cases selected for audit reduced from 44,000 (last year) to 14,000 now to ease out tax filers," he said.
The minister further stated said that the government would gradually reduce taxes on immovable properties along with increase in valuation rates of the immovable properties to bring them close to the actual market rates.
"With the passage of time, we will increase values of immovable properties, but we will also reduce taxes on properties," he maintained.
He said that the FBR is also focusing on human resource re-allocation under reforms in the tax administration.
Azhar said that the Federal Board of Revenue (FBR) has made a major policy shift this year for selection of cases for audit by focusing on only high-risk income tax, sales tax and federal excise duty cases to ensure audit in a professional manner.
Under the new audit policy, more transparency would be seen during audit of reduced number of high-risk cases. He said that powers of commissioner audit to issue notice to the taxpayers for selection of cases for audit need to be clearly defined. The tracking of notices issued in the field formations for audit needs be done on real time basis.
Azhar said the performance of the officers will also be evaluated and their working environment will be improved. He said technology will also be used to further enhance the performance of FBR. He said in future tax filers will be facilitated while there will be issues for non-filers. He said reserving the foreign exchange is the government's top priority.
Azhar said, "I have also requested the chairman FBR to start work on regulating powers of field commissioners to issue tax notices and separate the assessment office from the consequential audit office. "We have aimed at launching a single sales tax filing portal with provinces in July this year," he said.
He said that the new website of FBR is more user-friendly and contains all relevant tax laws and customer help portals. Its Urdu version is coming shortly too, he added.
The state minister said the FBR is now focussing more on quality rather than quantity and is reducing the number of notices sent for tax compliance.
He said the foreign exchange reserves have been steadily increasing since January this year. He said as a result of stabilisation measures, the deficits are on downward trajectory.
Chairman Federal Board of Revenue (FBR) Mohammad Jehanzeb Khan said taxpayers would be contacted with the help of technology to end direct interaction between the taxpayers and tax officials. He said that the FBR is bringing a number of fundamental changes in the audit policy to switch over from traditional audit techniques to a new approach to achieve the desired results. He said audit plays a very important role in tax system. The FBR intends to do all kinds of interaction with the taxpayers through IT system to minimise interaction between the taxpayers and the tax officials. "We want to do communication with the taxpayers through technology," he added.
The use of information technology (IT) would ensure selection of potential cases for audit. The FBR has classified high-risk or medium-risk cases for audit. If a huge number of cases is picked for audit, the exercise could not be done in a professional manner. There is a big backlog of audit which needs to be cleared, he said.
He said the tax compliance is the responsibility of taxpayers. The audit should be done in such a manner that the taxpayer should know that the system can check him in case he files return wrongly.