The Federal Board of Revenue''s exercise of broadening the tax base revealed that nearly 60 percent of income tax return filers claimed nil income earned from agriculture sector or remittances and the declared data on agricultural income has been shared with the provinces to check the authenticity of their claims in the returns.
Federal Board of Revenue Chairman Salman Siddiq told reporters on Monday that during the broadening of tax base drive over 700,000 rich had been identified and around 60 percent of return filers have declared that they have created these assets from agriculture income and remittances, 50 percent of them mentioned their income from agriculture and 10 percent income from remittances. Once the verification of such details to be received from provinces for those who don''t have agriculture income, than FBR would be taking next step to enforce filing of income tax returns, who have submitted wrong data.
He said that the due to discriminatory tax system a major portion of the population, despite having wealth and assets is not paying their due taxes and there is dire need to bring such persons in income tax net or agriculture income tax net. Provinces are also making arrangements for improved agriculture income tax mechanism and Punjab has proposed unified rate and mechanism for this tax.
In this connection, the FBR has decided to share data of those rich who have been identified under the drive of documentation and declared that they have created their assets from agriculture income so as to book them under provincial agriculture income tax net.
FBR Chairman further highlighted that the Board has found that nearly 60 percent of income tax returns filers claimed nil income earned from agriculture sector out of total 36,000 filed returns. "Out of 60 percent showing nil income in their returns, there is 10 percent who have shown receiving money from abroad in shape of remittances," he added. Sharing another major step to improve audit system, Salman Siddiq stated that the FBR has also decided to launch Risk Based Audit Plan based on central risk benchmarks for selection of income tax returns for Tax Year 2011 from January 2012. This plan would remain under implementation for next six months and risk criteria would be forwarded to regional tax offices for selection of income tax returns for total audit of income tax returns and said that hopes are high that this audit would yield good results, he added.
He also informed that a major step is being implemented from January 2012 under which no input tax adjustment would be allowed to GST registered persons who would not mention CNIC and NTN of their un-registered buyers in the sales tax returns. This would help not only to document the economy, but, would also help increase revenue in this fiscal year, he added.