ISLAMABAD: The Federal Board of Revenue (FBR) will empower Inland Revenue officials to seal unregistered people’s company premises, restrict financial activities and prohibit the opening of the new bank accounts.
Under the new tax bill, the proposed measures aim to promote tax compliance with tax laws and guarantee that taxes are paid based on income and consumption levels. All of these initiatives require government permission before being implemented.
The bill proposes restricting a person’s financial transactions with the mapping of declared cash and assets in the income tax returns. However, the government allows a taxpayer to acquire a vehicle, or property, or engage in financial transactions in the names of family members who match his claimed cash and assets.
FBR shares 46 sets of third-party data with IR field offices
However, the government defines who is eligible to conduct all of these transactions, with a few exclusions.
The bill includes particular provisions in sales and income tax to encourage people to register under the tax laws, introduce category of eligible persons for financing tractions, as well as the power to commissioner of income tax to hire experts and auditors to determine real tax collections from taxpayers.
The eligible person will include his immediate family members—parents, spouse, son (below the age of 25 years), daughter (unmarried, widowed or divorced) or a special child. Two more conditions were proposed in the bill for financial transactions that eligible person will specify the sources of funds in last return for transactions.
The sufficient resources will be considered as 130 per cent of the cash equivalent assets declared in the last filed tax return or in the case of a company or association of person cash and equivalent assets declared in the financial statements attached with the income tax return for the latest tax year. The financial transactions are linked with the declared sources of investment and expenditure statement in the last filing income tax return.
The bill proposes restrictions on economic transactions of ineligible persons. Manufacturer of a motor vehicle or vehicle registering authority of excise and taxation department will not accept or process any application of an ineligible person for booking, purchase or registration of a motor vehicle.
Similarly, the FBR has restricted the registration, recording, or attesting transfer of any immovable property whose value must be notified by the FBR. The authority will not accept or process such transactions that exceed the notified value.
There will also be restriction on authorized person to sell securities including debt securities or units of mutual funds to an ineligible person. The FBR will notify persons who will not be eligible to open a bank account or maintain already opened current or saving bank account or investor portfolio securities account except Asaan account. The bank will not allow cash withdrawal from any of the bank accounts of any person exceeding the amount. FBR will notify the limit from time to time.
The financial transactions restrictions will not apply to purchase of rickshaws or motorcycle rickshaws or tractors and purchase of a pick up vehicle having engine capacity up to 800 CC. The FBR will notify restriction or limitation for the purchase of trucks and busses.
The FBR will also notify the limit for investment in securities. The restrictions will also not apply to financial transactions of an ineligible person who has filed sources of investment and expenditure statement. The FBR will allow such individuals who declare in return to make purchases using loans or inheritance cash.
The restriction will not apply to non-residents or public companies. The FBR will also not pursue any concealing cases against persons who disclose cash or assets in return related to remittances or inheritance for financial activities.
Copyright Business Recorder, 2024
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