KARACHI: More than 120,000 initial notices (u/s 114 of the Income Tax Ordinance 2001) have been issued – based on large potential fiscal liabilities and location to ensure the initiative is nationwide- and more than 38,000 second notices (under section 122C) which are to be followed by provisional assessment, collection procedures, and penal and prosecution proceedings.
So far, more than 17,000 individuals have filed returns as a result of the initiative. Provisional tax assessment (under section 122 of the law) has been made in more than 28,000 cases.
The FBR has created tax demand about Rs11 billion and collected Rs306 million.
The new policy measures taken through Finance Act 2014 to broaden the tax base include a new regime wherein different rates of withholding of Income tax for income tax return filers and non-filers on certain transactions have been introduced.
This includes sale and purchase of immovable property, purchase, registration and transfer of ownership of motor vehicles, cash withdrawal from banks, and payment of profit on debt and dividend income.
The higher rates of tax for non-filers will not only provide an incentive to non-filers to file returns and declare their income from all sources, but also provide a database to FBR for identification of potential taxpayers to be pursued of broadening of tax base initiative.