The Federal Board of Revenue (FBR) is set to introduce a range of rigorous measures to combat tax non-compliance and ensure accurate income tax returns are submitted. The new policy proposals aim to address issues related to incorrect or incomplete tax filings by imposing severe penalties and enforcement actions.
Announced on Thursday, the FBR’s proposed measures include freezing bank accounts for individuals and entities found guilty of submitting inaccurate or incomplete tax returns. In addition to this, the FBR has suggested a ban on the purchase of immovable properties and vehicles for these filers. Other punitive actions under consideration involve disconnecting utility services and imposing substantial fines. The goal of these steps is to curb tax evasion and ensure adherence to tax reporting obligations.
The proposals, outlined by the FBR Member Inland Revenue (Operations), are part of a broader strategy to enhance tax compliance across various sectors, including Tier-1 retailers and manufacturers. These measures will apply to both Sales Tax and Income Tax filings, reflecting a comprehensive approach to improving the accuracy and completeness of tax returns.
A notable aspect of the proposed policy is the imposition of a hefty fine of Rs. 1,000,000 for each instance of incorrect or incomplete tax return filing. This significant financial penalty is intended to deter tax evasion and encourage more accurate reporting.
In addition to financial penalties, the FBR plans to disconnect utility services for those who fail to submit correct returns. This action is designed to put additional pressure on individuals and businesses to comply with tax regulations. Furthermore, the FBR will freeze the bank accounts of those who submit erroneous returns, making it challenging for them to access their funds and conduct financial transactions.
Another critical component of the proposed measures is a ban on purchasing any immovable property or vehicles for individuals and entities that file incorrect or incomplete returns. This restriction aims to limit their ability to make significant investments and further incentivizes accurate tax reporting.
To improve transparency and accountability, the FBR will involve third-party monitoring to oversee the accuracy of tax returns. Additionally, advanced technologies such as artificial intelligence (AI) and machine learning (ML) will be employed to conduct immediate and comprehensive audits of tax filings. These technologies are expected to enhance the FBR’s ability to detect discrepancies and ensure compliance.
The FBR believes that these measures will be instrumental in strengthening its tax enforcement regime and achieving its fiscal targets. “We are committed to enhancing our tax enforcement capabilities and ensuring that taxpayers adhere to their reporting obligations,” an FBR spokesperson stated. “These proposed measures are designed to address the challenges of tax compliance effectively. We are open to discussions on these proposals and welcome suggestions to improve their impact.”
As the FBR advances with these policy proposals, taxpayers and stakeholders will need to stay informed about the evolving requirements and implications. The outcome of these measures will be closely monitored, as they have the potential to significantly influence tax compliance practices and impact the broader economic landscape.