ISLAMABAD: The National Database and Registration Authority (NADRA) is expected to compute income and tax liability of non-filers during the current month based on 14 million records of financial transactions provided by the Federal Board of Revenue (FBR).

Sources told Business Recorder here on Wednesday that the NADRA is using artificial intelligence for finalising the profiles of the potential taxpayers. The exercise is expected to be completed by the end of December. Tax authorities have provided 14 million records of financial transactions of citizens to the NADRA to compute indicative income and tax liability of non-filers by use of artificial intelligence.

According to the sources, the 14 million financial records included property transactions, vehicle purchases, registration of cars with provincial excise departments, buying/selling of movable and immovable properties, utility bills, foreign travels, and other heavy expenditures.

The NADRA is matching this data with its own database and working out the estimated income of the taxpayers and non-filers. On the basis of the FBR’s record of third-party data, the NADRA would finalise the profiles of these persons.

Based on the FBR’s third-party data, the NADRA would 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.

NADRA empowered to share citizens' details with FBR

The NADRA is allowed to 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 mis-declared 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.

Under the exercise, the NADRA’s cross matching of data with the FBR’s information would result in a new profile of the taxpayer. The updated profile or information of taxpayers would be available on the FBR’s website. Non-filers would receive SMS to check their profiles at the website using their CNICs and file their returns and pay the due amount of taxes.

In case of non-compliance, strict legal action would be taken against them. The FBR will give these taxpayers ample time to voluntarily file their income tax return to avoid penal action. The FBR will also establish special Call Centres to facilitate these citizens in filing their income tax returns. The FBR will also assist these citizens to timely file their tax returns based on the NADRA’s profiles.

Copyright Business Recorder, 2021