Broadening tax base by FBR: government departments bound to provide information

The government departments and organisations are legally obliged to provide information to the Federal Board of Revenue (FBR) for broadening the tax base under the provisions of the Income Tax Ordinance 2001. Tax experts told Business Recorder here on Wednesday that the FBR is legally empowered under the Income Tax Ordinance 2001 to obtain information about citizens from any government department to verify source of income.
Different tax administrations like Chile and Turkey acquire free of cost third-party data from dozens of agencies for collection of information about the taxpayers. If every department starts providing data to the FBR as per section 176 of the Income Tax Ordinance, Pakistan will enter the regime of countries where the tax-to-GDP ratio has increased through broadening the tax base using third-party information.
They said that section 176 of the Income Tax Ordinance 2001 gives legal powers to obtain any kind of information from government departments even if their respective laws restrict disclosure of information. The section 176 is related to the notice to obtain information or evidence from any person or government department. Through a simple notice to the government department under section 176 of the Income Tax Ordinance 201, the FBR can seek information about the citizens for tax purposes, if required.
The authority of the officials of Inland Revenue under section 176 of the Ordinance 2001 is enough to obtain any kind of data from government departments for broadening the tax base. Even if the law of any government department does not permit to give information under its law, the FBR can issue a notice to such department under section 176 of the Ordinance 2001 for seeking information about the citizens.
The powers of the FBR under section 176 could be judged from the fact that the FBR can obtain free of cost information about any person within the limits of the said provision of the law. Experts said that under section 176, the Commissioner may, by notice in writing, require any person, whether or not liable for tax under Income Tax Ordinance 2001 to furnish to the Commissioner or an authorised officer, any information relevant to any tax as specified in the notice. The Commissioner or authorised officer may require the persons examined to produce any accounts, documents, or computer-stored information in the control of the person.