Non-filers: DTOs authorised to disconnect utility connections

Updated 18 Nov, 2023

ISLAMABAD: The government on Friday established 145 District Tax Offices (DTOs) across the country for bringing 1.5 million to 2 million new taxpayers into the tax net till June 2024.

The District Taxation Officers would be fully authorised to disconnect utility connections including electricity and gas connections and block of mobile SIMs of non-filers under section 114B in the Income Tax Ordinance, 2001.

The Board shall have the powers to issue Income Tax General Order in respect of persons who are not appearing on ATL but are liable to file return under the provisions of Income Tax Ordinance.

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The Income Tax general order may entail any or all of the following consequences for the persons mentioned therein: Disabling of Mobile Phones or Mobile Phone SIMs; discontinuance of electricity connection; and discontinuance of gas connection.

As part of restructuring measures in the Federal Board of Revenue, the Finance minister has approved the establishment of 145 District Tax Offices which will focus on bringing 1.5 to 2 million new taxpayers into the tax net till June, 2024. The prime minister has stressed the importance of revenue and increasing the existing number of tax filers during recent meetings.

The FBR on Friday notified the offices of 145 District Tax Officers, a new establishment that will help broadening the tax base and ultimately raising tax-to-GDP ratio to a desired level. These offices would be headed by District Tax Officers entrusted with the responsibility of enforcing Income Tax Returns from non-filers and stop filers.

Establishment of these offices heralds a new chapter that would expand tax net to fill a critical tax gap on the path to bring all potential taxpayers into the tax net.

These new offices would be headed by dedicated Inland Revenue Officers in BS-17/18 which would obtain and utilize third party data acquired from multiple departments and agencies that hold critical information regarding investment in assets and incurring of huge expenditures by potential taxpayers who till now have managed to escape and stay away from the taxation system including registration and filing of tax returns.

One of the tools to be utilized for this purpose would be invoking recently introduced section 114B in the Income Tax Ordinance, 2001 which authorizes the department to disconnect utility connections including electricity and gas connections and blocking of mobile SIMs, if return is not filed in response to notices issued.

Federal government is committed to utilize all measures and provide assistance to FBR. A new Documentation Law is also being introduced to obligate various agencies/departments to provide data to the FBR through automated common transmission system. Collaboration and assistance from the National Database and Registration Authority (NADRA) has also been sought.

The chairman NADRA has assured Federal Board of Revenue for its assistance for widening of tax base through Data Integration.

The initiative would not only strengthen FBR capacity to enforce tax laws but will also facilitate taxpayers in filing tax returns by establishing dedicated offices.

Copyright Business Recorder, 2023

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