THURSDAY APRIL 14: Checking fiscal frauds: DG I&I identifies 31 sources of information

ISLAMABAD: The Directorate General of Intelligence and Investigation, Inland Revenue, has identified 31 major sources of information encompassing Suspicious Transactions Reports (STRs) of the Financial Monitoring Unit (FMU) of the State Bank of Pakistan (SBP) for checking fiscal frauds/financial crimes and broadening of the tax base.
Sources told Business Recorder here on Wednesday that the Director General of I &I Inland Revenue Shahid Hussain Asad and his team have started collecting third-party information to broaden the tax base. This is for the first time that the intelligence arm of the FBR has picked 31 key sources of information to collect vital data for documentation of different business transactions in the informal sectors.
Sources said that the FBR can inquire of the justification behind extraordinary business transactions for taxing such income. The tax department can ask why such big transactions involving (profit or income) have not been declared. The STRs could also be helpful for the tax department in collection of information about such suspicious business transactions for documentation purposes. It is not necessary that every STR would be required by the FBR, but the tax department can call information about some STRs, if necessary.
Sources said that people legalise their black money by sending certain amount abroad through 'Hundi' etc and transmit foreign currency from Dubai to Pakistan through normal banking channel to obtain immunity under section 111 of the Income Tax Ordinance. The directorate would try to check such illegal means used to legalise the black money having tax implications.
Secondly, FBR can scrutinise data of banks to check whether proper withholding tax deductions have been made by them or not. In case of default of banks as withholding agent, the agency can recover the deducted tax from the concerned bank. About the legal status of the FBR to call for STRs, sources said that the FBR has the legal authority under the provisions of the Income Tax Ordinance 2001 to obtain information from banks. The FBR has wide range of powers under Ordinance 2001 for collection of data from other organisations.
The FBR's sources of information would also cover Nadra's Data Base; land revenue transactions; excise & taxation's record; record from Securities and Exchange Commission of Pakistan (SECP); immigration wing (foreign travelling); Pakistan Bar Council; Pakistan Medical and Dental Council (PMDC), Pakistan Engineering Council (PEC) and specialised bodies of professionals; NGOs/ NPOs/ societies/ trusts/ associations; commercial centres/plazas/shopping malls; hotels/ restaurants/ food outlets/ bakers; rented properties; advertisements (electronic & print media); housing societies& schemes/ developers/ town planners and foreign education.
Other sources of information include dual nationalities; agri-businesses; transport business; franchises/ brokerage/ commission/ indenting; utility services providers; business of vehicles/ car rental; withholding statements; private educational institutions; private nursing homes/ clinics/ hospitals; leases; investment in listed companies; money changers/ exchange companies; IT professionals & IT businesses; suspicious transaction reports; services (consultants/ advisors/ analysts); media (newspapers/ periodicals/ TV& radio channels/ internet) and information available with the Directorate General of Customs Intelligence FBR.