ISLAMABAD: The Federal Board of Revenue (FBR) would use "Mahassal", an advance version of Tax Management System (TMS), as an enforcement tool during current fiscal year 2011-12 to ensure filing of income tax returns and statements by thousands of registered persons, who are paying no tax, less tax, or declaring loss or 'nil income', to evade the authorities.
Sources told Business Recorder here on Sunday that the "Mahassal", latest version of the TMS, covers all income tax related functions including returns analysis, assessment and verification processes. During 2011-12, the FBR has decided to effectively utilise database of the "Mahassal" to enforce filing of returns during 2011-12. In this connection, the data of manually received returns for tax year 2010 and tax year 2011 would be entered into the "Mahassal" system by December 31, 2011. The "Mahassal" was internally developed by the tax department during last many years with the help of most experienced income tax officials.
Sources said that the "Mahassal" system has already started generating computerised notices to the non-filers of income tax returns under section 114 of the Income Tax Ordinance 2001. Through "Mahassal", auto-generated notices could be issued to the taxpayers in a systematic manner. It is expected that the FBR's enforcement authorities would be able to improve direct taxes collection during 2011-12 with the help of this indigenously developed system.
Following are the FBR's instructions issued to the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to use "Mahassal" as an enforcement tool during 2011-12 through this procedure:
The field formations shall enforce compliance from non-filers/stop-filers, short-filers for the tax year-2010 and the previous tax years by the enforcement procedures given hereunder for achievement of laid down benchmarks on monthly basis and complete the task without further delay. In case of Income Tax, all RTOs and LTUs shall ensure that data of manually received returns for tax year 2010 is entered into the "Mahassal" system by December 31, 2011, and shall also furnish certificate to Member, Enforcement and Accounting, through the Member, Inland Revenue. All RTOs and LTUs shall ensure that notices for filing of returns are issued to all defaulters who have not filed their returns for the tax year 2010 and previous tax years. Cut-off date(s) for issuance of notices under section 114(4) or 115(5) of the Income Tax Ordinance 2001 as the case may be, would be November 30, 2011 for all LTUs and December 31, 2011 for all RTOs.
In case of tax year 2011, the FBR's instructions said that the all RTOs and LTUs shall ensure that data of manually received returns for tax year 2011 is entered into the 'Mahassal' system by 31.1.2012, and shall also furnish certificate to this effect to Member, Enforcement and Accounting, through the Member, Inland Revenue. The cut-off dates for issuance of notices under section 114(4) or 115(5) as the case may be, would be March 31, 2012 for all LTUs and April 30, 2012 for all RTOs. All RTOs and LTUs shall ensure that return enforcement notices are issued only to non-filers/short-filers. The Pakistan Revenue Automation Limited (PRAL) shall generate lists of non-filers/short-filers for the tax year 2011 according to the given timelines. The LTUs/RTOs shall achieve the laid down benchmarks on monthly basis and complete the task for tax year 2011 up to June 30, 2012 by undertaking the following enforcement procedure.
For the registration of un-registered persons, the RTOs and LTUs (if warranted) to enlist new revenue potential cases on the basis of third-party information, like electricity, gas, telephone bills, imports, property and motor vehicle purchases, club memberships, etc and withholding tax statements, on the basis of guidelines given as per para-3 (where relevant) of the plan, complete the requirements for NTN registration and send those cases to PRAL at the earliest (if not sent as yet). The PRAL would have to complete National Tax Number (NTN) registration and e-enrolling process in newly listed cases at the earliest (if not sent as yet), the FBR added.