Wealthy undocumented persons: DG I&I directs BTB heads to complete assessment by June end

Shahid Hussain Asad Director General, Directorate of Intelligence and Investigation, Inland Revenue on Wednesday categorically conveyed to the heads of the Broadening of Tax Base (BTB) Units to complete at least 10,000 income tax assessments of wealthy un-documented persons by June 30, 2011.
Sources told Business Recorder here on Wednesday that the DG I&I Inland Revenue has given this message to the Unit Incharge of the BTB Units of the Regional Tax Office (RTO) at a meeting convened here at the FBR headquarters. On special invitation, former FBR Member Direct Taxes Vakeel Ahmed Khan also attended the meeting.
The crux of the meeting was that the DG I&I Inland Revenue directed the field officers to give top priority to those cases where field formations is very much sure and certain about the available information so that the short time left is effectively utilised for generating more revenue and bringing good cases to the tax net.
The meeting reviewed the overall progress on the implementation of the national strategy to document the economy and bring wealthy persons into the tax net. According to sources, Shahid Hussain Asad informed the field formations that the heads of the BTB Units must ensure finalisation of high quality assessments of 5,000 to 10,000 un-documented persons, giving a clear message to the general public to voluntarily file their income tax returns or amend the returns to declare accurate income/assets.
Otherwise, legal action including prosecution and attachment of bank accounts/property would be initiated against the un-documented persons, whose profiles have been completed by the registered persons. In the next 1-2 months, the finalisation of income tax assessments would give a clear and loud message to the un-documented persons to face legal proceedings for non-compliance of departmental notices.
DG I&I Inland Revenue further informed the field formations that a quick action has to be done for documentation of the wealthy persons to demonstrate the will of the government. The un-documented persons cannot escape in the presence of the authentic data obtained from NADRA and strict legal action be initiated against non-compliant persons as admissible under the law.
During the meeting, DG I&I Inland Revenue provided vital information about 4,000 to 5,000 more un-documented persons to the field formations for further necessary action and issuance of notices to them. Beside already action against over 20,000 persons, the profiles of 4,000 to 5,000 more persons have been submitted for documentation purposes.
It has been highlighted that the FBR's intelligence agency would try its level best to take action against the un-documented persons to assist the government in broadening the tax-base. In this regard, the enforcement provisions must be invoked under the provisions of the Income Tax Ordinance 2001 for taking action against the un-documented persons.
Shahid Hussain Asad further directed the Unit Incharge of the BTB Units of the RTOs to adopt a uniform policy for documentation of wealthy persons. A uniform strategy across the country is necessary to give message to the elite un-documented class, whose profiles have been completed by the agency.
The former FBR Member Direct Taxes Vakeel Ahmed Khan shared his experience with the tax officials on measures to broaden the tax-base. While giving different examples, Vakeel informed participants to first understand the nature of the business and then invoke relevant provisions of the tax laws for assessment purposes. The understanding of the business is necessary to check methods adopted by some unscrupulous elements for concealment of taxes. In this regard, former Member Direct Taxes gave a number of examples to the tax officials.
He also explained the participants about various techniques to be used in making good assessments and obtaining relevant information from the taxpayers with a view to determining their income up to maximum possible extent. He advised the BTB officers to first of all understand the business and economic activity of the person, who is to be assessed by them. Secondly, the tax officer should find out the possible areas through which taxpayer can evade or mis-declare the information. These are the two basic principals to be followed by the tax officers in making assessments instead of asking for similar type of information from all the taxpayers irrespective of nature of their business, Vakeel Ahmed Khan added.
General Manger (GM) Pakistan Revenue Automation Limited (PRAL) Imtiaz Ahmed Khan explained the participants about the data warehouse being maintained in respect of internal and external sources of data and emphasised that the data for broadening of tax-base can only be helpful if the unique identifier in the form of NTN or CNIC is obtained with the data. He further informed the meeting that if the RTOs and LTUs ensure proper and regular electronic filing of tax statements, then this data will automatically become part of data warehouse and will be of great help in broadening of tax base, sources said.
He further emphasised that preference should be given to obtain the data in electronic format, however, in case the department providing the data is not in a position to provide it electronically then, it should be converted into electronic format by the RTOs. He also offered the data feeding services at PRAL headquarters for conversion of manual data into electronic format for its proper utility by the concerned officials, sources added.