FBR’s Inclusive Tax Reformation: Empowering a Million New Taxpayers for Economic Resilience

The Federal Board of Revenue (FBR) is taking significant steps to bring more people into the formal tax system. Their plan is to include over a million non-filers and those who stopped filing income tax returns. The approach is organized and happening in phases, with the aim of identifying one million non-filers and potentially two million new taxpayers by June 2024 when considering unregistered individuals.

The plan is comprehensive, covering both those who haven’t been filing taxes and new taxpayers who were previously outside the tax net. Small business owners, especially shopkeepers, are also part of the initiative. They will be required to pay taxes based on the rental value of their shop properties, ensuring a fair contribution.

The FBR is actively communicating data to field formations to bring non-filers into the tax net. The analysis involves studying withholding tax statements to identify individuals who need to file income tax returns. Notices will be sent to those who filed returns for one-time transactions or to qualify for the ‘Active Taxpayer List,’ encouraging them to promptly file their income tax returns.

To enforce compliance, the FBR has obtained third-party data and plans to serve notices to unregistered persons, which may lead to disconnection of utility services and blocking of mobile SIMs. A new Documentation Law is being introduced to compel various agencies and departments to provide data to the FBR through an automated system. Collaboration with the National Database and Registration Authority (NADRA) is sought to enhance data integration.

To support this initiative, 145 District Tax Officers’ offices have been notified. These offices, led by dedicated Inland Revenue Officers, will utilize third-party data to enforce income tax returns from non-filers and stop-filers.

In conclusion, this forward-looking initiative by the FBR not only strengthens their ability to enforce tax laws but also establishes offices dedicated to helping taxpayers file returns. It is a crucial step towards a more inclusive and resilient economic future, showing the government’s commitment to financial well-being and growth.