Monitoring/recovering WHT by DG (I&I) IR: statutory changes in tax laws to be introduced

The Federal Board of Revenue (FBR) has decided to introduce statutory and procedural amendments in the tax laws to empower the Directorate General of Intelligence and Investigation Inland Revenue (IR) to monitor/recover withholding taxes and collect information about the details of accounts of any existing or new taxpayers from the banks using computerised national identity card (CNIC) numbers.
Sources told Business Recorder here on Saturday that the FBR has taken the decision under the new plan of documentation prepared by Shahid Hussain Asad, Director General, Directorate of Intelligence and Investigation, Inland Revenue, to ensure documentation of 700,000 potential persons during 2011-12. Another major initiative is to bring entire withholding tax regime within the purview of the Director General, Intelligence and Investigation IR.
According to the FBR new plan of documentation, the Director General, Directorate of Intelligence and Investigation IR made a detailed presentation on the broadening of tax base through their independent data and sharing of intelligence by Nadra at the FBR Board-in-Council. The head of the intelligence agency also proposed certain strategic and procedural as well as administrative initiatives for furthering the goal of 700,000 new tax payers. Based on the detailed discussion, Board-in-Council approved the new documentation plan for broadening the tax base.
Firstly, to monitor all withholding taxes the additional charge of DG (Withholding Taxes) would be given to DG(I&I) IR. This would enable the DG Intelligence IR to monitor and take enforcement actions in cases of all kinds of withholding agents with legal backing under the law. Resultantly, the powers available to the Directorate General Withholding Taxes would now be available to the DG Intelligence IR.
Secondly, As National and Database Registration Authority (Nadra) has provided information about only 43,000 cases. Therefore, in order to make Nadra formally obliged for sharing intelligence of existing and new taxpayers, a memorandum of understanding (MOU) is to be finalised with Nadra and put up for approval of the Board-in-Council. The signing of the MOU between the FBR and the Nadra would enable the tax department for smooth collection of information about the potential persons from the Nadra. Under the proposed MOU, Nadra would be obliged to provide information to the FBR.
Thirdly, it has been decided that necessary statutory and procedural amendments would be proposed that enable DG (I&I) IR to call for account details of any existing or new taxpayer from the banks on the basis of CNIC. Fourth, the necessary number of officers and staff may be provided to DG (I&I) IR for optimum functioning of the organisation.
Fifth, a national survey is to be conducted to verify the NTN status and filing of returns by business establishments, departmental stores and big retail outlets in posh markets. Sixthly, in order to ensure effective control and enforcement of optimum data utilisation, PRAL is to develop the needed IT software as already requested by DG (I & I) IR.
Seventhly, the directorate would also ensure that the National Tax Numbers would be displayed at the business premises. Eight, the statement regarding break-up of sales should be obligatory for the manufacturers and wholesalers and statements regarding break-up of purchases should be made mandatory for the retailers, sources added.