Islamabad: The government, which had announced resolving issues with the IMF smoothly, has prepared to tighten the noose around current taxpayers after retreating from actions against traders.
The government has prepared legal amendments to deny the right to purchase assets for income tax return filers if their declared cash balance and income are less than the cost of new assets.
Analysis reveals that among 6 million income tax return filers, only about 45,000 Pakistanis declared an annual income exceeding 10 million rupees.
Tax authorities have said the government believes most of the approximately 6 million current filers have underreported their assets and income in the annual returns submitted to the FBR.
It has been decided to target those individuals and firms already within the tax net for additional revenue.
This will be done either by issuing a presidential ordinance or by presenting a bill in the National Assembly.
The government’s decision to collect higher taxes on asset purchases by non-filers is due to the narrow tax base and lower taxes paid by filers.
Filers may also be prevented from withdrawing cash from banks if their total cash amount is less than what is shown in their tax returns.
According to government sources, the FBR has proposed implementing these new stringent legal measures from October 1.
Officials have stated that the FBR will give government departments and commercial banks access to the information of current taxpayers to prevent them from purchasing assets.
Pakistani industrialists have already started their businesses abroad, and people are seeking ways to avoid heavy taxes.
This situation has severely burdened salaried and business individuals. Salaried employees pay up to 39% of their total salary in taxes, while business people face a rate of nearly 50% of their net income.
FBR sources indicate that the government is also proposing to deny mutual fund and stock market investment rights to those who do not file income tax returns.
Another proposal suggests that non-filers could be deprived of the right to purchase property.
However, it is unclear whether the government can implement this recommendation due to pressure from powerful lobbies.
Sources have reported that in the first phase, approximately 2 million income tax returns of federal, provincial, and government employees will be collected in advance to encourage them to pay their due taxes.
The FBR intends to pursue business individuals who are already filers but are allegedly not paying their due taxes.
The number of filer business individuals is 3.7 million, with 2.4 million of them not paying income tax last year. Only 20,000 declared an annual income exceeding 10 million rupees.
The remaining 921,000 declared an annual income below 10 million rupees.
According to FBR officials, among 2 million salaried filers, approximately 630,000 had annual incomes below the 6 lakh rupees threshold.