ISLAMABAD: The government has given legal backing to the National Database and Registration Authority (NADRA) to compute indicative income and tax liability of any citizen by use of artificial intelligence, mathematical or statistical modelling or any other modern device or calculation method.

The powers have been extended to the NADRA through the promulgation of the Tax Laws (Third Amendment) Ordinance, 2021. The NADRA and the FBR can enter into a memorandum of understanding for a secure exchange and utilisation of a person's information.

Under the Ordinance, the NADRA shall, on its own motion or upon application by the Board, share its records and any information available or held by it, with the Board, for broadening of the tax base or carrying out the purposes of the Income Tax Ordinance 2001.

The NADRA may submit proposals and information to the Board with a view to broadening the tax base; identify in relation to any person, whether a taxpayer or not: (a) income, receipts, assets, properties, liabilities, expenditures, or transactions that have escaped assessment or are under-assessed or have been assessed at a low rate, or have been subjected to excessive relief or refund or have been misdeclared or misclassified under a particular head of income or otherwise; (b) the value of anything mentioned in sub-clause (a) of clause (ii), if such value is at variance with the value notified by the Board or the district authorities, as the case may be, or if no such value has been notified the true or market value; and (iii) enter into a memorandum of understanding with the Board for a secure exchange and utilisation of a person's information.

The Board may use and utilise any information communicated to it by the NADRA and forward such information to an income tax authority having jurisdiction in relation to the subject matter regarding the information, who may utilise the information for the purposes of this Ordinance.

The NADRA may compute indicative income and tax liability of anyone mentioned by use of artificial intelligence, mathematical or statistical modelling or any other modern device or calculation method.

The indicative income and tax liability computed by the NADRA shall be notified by the Board to the person in respect of whom such indicative income and tax liability has been determined, who shall have the option to pay the determined amount on such terms, conditions, installments, discounts, reprieves pertaining to penalty and default surcharge, and time limits that may be prescribed by the Board.

In case the person against whom a liability has been determined, does not pay such liability within the time prescribed, the Board shall take action under this Ordinance, upon the basis of tax liability computed.

If the person against whom the liability has been determined pays such liability, such payment shall be construed to be an amended assessment order under section 120 or sub-section (1) of section 122 or sub-section (4) of section 122 as the case may be.

For the purposes of sub-sections (4) and (5), the Board may prescribe the extent of installments, reprieves pertaining to penalty and default surcharge and time limits, the FBR added.

Copyright Business Recorder, 2021