In a landmark move to enhance tax compliance and revenue collection, the Federal Board of Revenue (FBR) has proposed stringent measures that could significantly impact individuals who fail to file their tax returns. The proposal suggests closing electricity and mobile phone connections for non-filers, freezing bank accounts, and implementing advanced data collection methods to trace and track financial transactions. These measures aim to encourage citizens to fulfill their civic duty of contributing to the national exchequer and strengthen the economic foundations of the country.
Closing Electricity and Mobile Phone Connections:
One of the most striking proposals put forth by the FBR is the potential closure of electricity and mobile phone connections for individuals who do not file their tax returns. The rationale behind this bold step is to create a direct impact on the daily lives of non-filers, urging them to comply with tax regulations. Critics argue that this measure might be seen as harsh, especially for those facing genuine difficulties in filing their returns. However, proponents emphasize its effectiveness as a deterrent to non-compliance.
Freezing Bank Accounts:
The freezing of bank accounts for non-filers is another significant proposal in the FBR’s strategy to ensure tax accountability. This measure aims to restrict financial transactions for individuals who do not contribute to the national tax pool. The freezing of bank accounts is not a novel approach; many countries around the world have successfully implemented similar measures to compel citizens to meet their tax obligations. It is, however, crucial to strike a balance between encouraging tax compliance and addressing the potential challenges and inconveniences faced by individuals.
Collecting Data from Banks on Large Transactions:
To further strengthen its grip on tax evaders, the FBR is considering collecting data from banks on significant transactions. This proactive approach involves monitoring and scrutinizing large financial dealings to identify potential tax evasion. By closely tracking transactions, the FBR aims to minimize the opportunities for individuals to engage in undisclosed income generation and wealth accumulation.
Data Collection from NADRA:
The FBR’s plan also includes collaborating with the National Database and Registration Authority (NADRA) to trace and track financial transactions against individuals’ Computerized National Identity Cards (CNICs). This integrated approach seeks to create a comprehensive database that enables the FBR to identify potential tax evaders and irregular financial activities.
The FBR’s proposed measures signify a paradigm shift in Pakistan’s approach to tax compliance. While the potential closure of electricity and mobile phone connections, freezing of bank accounts, and extensive data collection may be met with mixed reactions, the underlying goal is to establish a culture of accountability and responsibility. It is essential for the government to strike a balance between ensuring tax compliance and addressing the concerns of citizens facing genuine challenges in fulfilling their tax obligations. If implemented judiciously, these measures have the potential to significantly enhance revenue collection, fortify the national economy, and create a more equitable tax system.
SAAB Tax Consultant Chamber 102 New Block DBA Okara Pakistan.