Broadening tax base: FBR has to pay for data verification service to Nadra: Tariq

National Database and Registration Authority (NADRA) is not providing any verification service free-of-cost to Federal Board of Revenue (FBR), and its has to pay for data verification service of wealthy persons for broadening the tax-base, said Tariq Malik, Deputy Chairman, Nadra her on Thursday.
"We are in negotiation with FBR for sharing the data, but its modalities are yet to be decided, which will take a little time," Tariq Malik said while talking to Business Recorder exclusively. FBR has sought Nadra's help to trace the potential taxpayers by using the national database and both the institutions are negotiating different ways as to how the data will be utilised, Nadra deputy chief said.
"We are fast moving and before signing the Memorandum of Understanding (MoU) and agreements we want to settle all issues so that the process will be streamlined once for all," Malik maintained. "Nadra will provide them assistance in chasing the people through CNICs and FBR will provide National Tax Numbers (NTNs) through which NADRA will help it," he added.
By going through the Nadra database, we will be in a position to check people who have no NTN numbers and they will be brought into tax net, he said, adding that Nadra informed the FBR authorities that it has a proposal for broadening the tax net, which was appreciated by FBR and declared it doable. Malik said that Nadra was willing to share information with FBR to help broaden the tax-base and raise the tax-to-GDP ratio.
It is important to mention that the FBR is legally empowered under the Income Tax Ordinance 2001 to obtain information of citizens from any government department, including Nadra, and to check their sources of income and expenditure. The section 176 of the Income Tax Ordinance 2001 gives legal powers to obtain any kind of information from government departments even if their respective laws restrict disclosure of information. The section 176 is related to the notice to obtain information or evidence from any person or government department. Through a simple notice to the government department under section 176 of the Income Tax Ordinance 201, the FBR can seek information about the citizens for tax purposes, if required.
Under the existing arrangement, the FBR is already verifying the CNICs from the Nadra before issuance of the NTN to a new taxpayer. The scope of section 176 of the Ordinance 2001 is wide, but so far the powers have not been fully invoked by the tax department. If the FBR fully invokes powers of section 176, the tax department can easily obtain information from regulatory authorities like Oil and Gas Regulatory Authority (Ogra), National Electric Power Regulatory Authority (Nepra) and others.