FBR likely to ask banks to provide details

KARACHI: The Federal Board of Revenue (FBR) may ask banks to provide details of persons whom the financial institutions paid Rs353 billion as profit on their deposits during the year 2012-13, official sources said on Saturday.

 

During the fiscal year, the banks deducted Rs35.3 billion as withholding tax at the rate of 10 percent on the profit paid against deposits of their accountholders, which shows that the banks paid Rs353 billion as profit on debt during the year, the officials said. Under the prevailing tax laws, every person is paying tax is a taxpayer. However, the FBR has failed to issue national tax numbers to those persons, the officials said.

 

They said that in this connection, Rehmatullah Khan Wazir, chief commissioner of the Large Taxpayers Unit (LTU), Karachi, had sent a letter to Member Information Technology of the FBR for bringing 7.5 million new taxpayers in the net within six months by taking measures. In the letter the unit requested the member to communicate with the banks for obtaining details of persons who earned income against their deposits, the officials said.

 

“Banks may be asked to provide data of these persons and on the basis of information, NTN may be issued to those who are not borne on the tax roll, as they are taxpayers under Section 2 (66) (C) and Section 39 (1) of the Income Tax Ordinance, 2001,” according to the letter.

The officials said that the purpose of such exercise is to probe persons’ incomes, which would be driven from business, rental or income from other sources other than interest.

 

The LTU Karachi has estimated that by doing this, the FBR will be able to make data of 20 million taxpayers, whereas currently the revenue authorities issued only 3.5 million NTNs. By bringing new taxpayers in the tax net, the tax machinery will also able to increase the revenue collection, they said. The LTU Karachi also said that around 120 million mobile phone subscribers are in the country, who paid Rs370 billion on phone card charges and paid tax of Rs37 billion in a single tax year.

 

At present, the persons under the tax net and are filing income tax returns are less than one percent of the mobile phone subscribers, the officials said. The LTU Karachi requested the FBR to obtain information regarding those mobile phone subscribers who paid Rs50,000 as advance tax during the fiscal year 2012-13. After cross matching with the existing data, the potential taxpayers may be identified, the LTU Karachi added.

 

The letter also informed the Member IT that there were several businesses and individuals, who have taxable income but not paying liabilities. The LTU Karachi requested the FBR to ask Nadra for sharing details of those persons who declared their business as industrialists, traders, vendors, shopkeepers or running any type of business or have shown professionals such as doctors, lawyers, architects, engineers, chartered accountants, etc.

Source: The NEWS

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