FBR drops idea of moving summary to ECC: Nadra help for revenue boost

The Federal Board of Revenue has dropped the idea of moving a summary to the Economic Co-ordination Committee (ECC) of the Cabinet for enforcement of the provisions of the Income Tax Ordinance 2001 to bring potential persons into the tax net with the help of National and Database Registration Authority (Nadra) data.
Sources told Business Recorder on Saturday that the FBR had prepared a summary for the ECC, titled "Broadening the tax-base" seeking permission for taking action against over 700,000 most rich and influential persons by invoking enforcement provisions (section 122-C) of the Income Tax Ordinance 2001. The FBR had also announced that the tax authorities will develop and submit a framework on the potential taxpayers to the ECC of the Cabinet for approval by February 15, 2011.
Legally, it was realised that the FBR has all legal powers to take action against the non-compliant taxpayers. Even the FBR has full legal backing for launching of the exercise to bring over and above 700,000 most influential persons into the tax net. These include rich people, who are earning huge income, but contributing nothing to the national kitty.
Sources said that the Income Tax Ordinance 2001 already gives ample powers to the FBR for making provisional assessment against the taxpayers under section 122-C of the Ordinance 2001. This provision of the Income Tax Ordinance 2001 empowers the department to complete provisional assessment of taxpayers, who failed to respond to notices of the department. Keeping in view the powers of enforcement available under the Income Tax Ordinance 2001, apparently there is no need to go to the ECC for implementation of the existing provisions of the tax laws.
The section 176 of the Income Tax Ordinance 2001 gives legal powers to the FBR for obtaining any kind of information from government departments even if their respective laws restrict disclosure of information. The FBR has analysed all aspects for moving summary to the ECC and finally decided to drop the idea in view of enforcement provisions available under the law. In the presence of all kinds of necessary powers, there seemed to be no justification to go to the ECC for implementation of the existing tax laws.
During the last meeting of the Senate Standing Committee on Finance, FBR Chairman Salman Siddique has said that with the full support of President, Prime Minister and Minister of Finance, the documentation exercise would be launched without facing any pressure from any quarter. All preparation has been finalised and a massive awareness campaign would be launched in this regard. The FBR will linkup the data with the Nadra database and action would be launched against the potential persons, who have neither obtained National Tax Numbers (NTNs) nor filing their due income tax returns. The FBR has identified over 700,000 persons based on their profiles available with the Nadra. As far as legal provisions of tax laws are concerned, the tax laws empower the FBR to collect information from any source. "The law permits me to access all kinds of external database," FBR Chairman said.
The FBR Chairman had further informed the committee that he had full support of the President, the Prime Minister and the Finance Minister. During on-going reshuffling in the tax machinery, nobody has called me that why I am making these transfers and postings. The whole process is unhindered.