Federal Board of Revenue Chairman Sohail Ahmed on Saturday categorically declared that the FBR has decided to exercise three options to deal with tax evaders ie freezing bank accounts, auctioning movable/immovable property and arrest particularly non-filers/defaulters after completion of all legal formalities under the tax laws.
On the conclusion of Commissioners' Conference here, he told media if the potential tax evaders continue to remain out of the tax net despite enjoying all kinds of opportunities, the tax agency is legally empowered to consider these options. This may include freezing of bank accounts, auctioning of property and arrest, if necessary.
During the commissioners' conference, the FBR has given go-ahead signal to the Chief Commissioners of Inland Revenue to invoke provisions of 'provisional assessment' of Income Tax Ordinance 2001 against the non-filers of income tax returns after December 31, 2009. This would be applicable in persons, who would fail to respond to notices.
It is learnt that the FBR has informed the Chief Commissioners to wait until December 31, 2009. After expiry of deadline, the FBR would invoke all relevant provisions of the law against the non-filers and short-filers. Around 1 million potential persons may face strict legal action in case of non-compliance from January 1, 2009. The rich persons having National Tax Number (NTNs), who would not file returns by December 31, would also face similar action under Ordinance 2001.
The FBR would provide documentary proof of ownership of property, expenses, expenditures, utility bills etc of the potential persons including businessmen and service providers, etc, in the notices. In case of non-compliance, assessment orders would be issued to them and recovery proceedings would be launched without delay. In case of salaried class, only those salaried individuals earning huge income in multinational companies, etc, would be picked for assessment after December 31, 2009.
It was noted that the FBR would not tolerate any kind of political pressure from any quarter. In case of any such situation, the FBR would immediately inform Finance Minister Shaukat Tarin to deal with such pressure or political influence being used to pressurise the tax machinery. The Finance Minister had directed the FBR to forthwith inform about the persons, who would try to influence the tax authorities during this exercise.
"The present government has given free hand to the tax machinery to invoke relevant provisions for bringing potential persons into the tax net without distributing the existing taxpayers. There is full political backing of the present government and we would take action against all potential persons without facing any political pressure from any quarter", a senior tax official said.
The FBR has decided to invoke provisions of newly introduced section 122C of provisional assessment of non-filers. The section 122C was incorporated in the Income Tax Ordinance 2001 through Finance (Amendment) Ordinance, 2009. Under section 122C, tax officials would make best judgement assessment (ex-parte assessment) on the basis of any kind of data available with the department. This would be applicable in the cases where any person failed to respond to the notice under section 114 for filing of income tax returns. The board is empowered to exercise section 122C for the returns for Tax Year 2009.
Meanwhile, Sohail Ahmed told reporters the FBR has provisionally collected Rs 55 billion in December 2009 against the target of Rs 124 billion. The FBR is expected to collect Rs 140 billion during this period after including arrears. During the first five months and 19 days of December, the FBR had collected Rs 500 billion and the collection is likely to touch Rs 595 billion by December 31, 2009.