50 000 Tax Notices to be Issued in Pakistan

July 24, 2013 Taxation in PakistanTaxation in Palestine

M A JinnahISLAMABAD – ISLAMABAD – Pakistani tax authorities will soon make contact with suspected tax evaders to remind them of their obligations and to retrieve previously unpaid taxes, in hopes of putting an end to the widespread tax dodging in the country.

On July 23rd the newly appointed Chairman of the Federal Revenue Board (FRB) Tariq Bajwa announced that over the course of the next three months his department will send out more than 50 000 tax notices to individuals suspected of willfully evading payment and avoiding reporting requirements.

The first lot of 10 000 notices will be sent by the end of this month, while batches of 15 000 and 25 000 will be sent out over August and September, respectively.

The FRB hopes that the new step will help increase tax revenues in the country both in the long term and the short term, with the immediate benefit of recovering unpaid taxes, and an ongoing benefit of bringing more individuals into the tax net.

Sending out tax notices and reducing the occurrence of tax evasion by individual taxpayers is one of the conditions imposed on Pakistan by the International Monetary Fund, as part of the continuing discussions regarding the country’s bailout package.

Currently, only 0.7 million Pakistanis are registered as a taxpayers, less than 1 percent of the population.

The tax notices are not the only step being taken by Pakistani tax authorities at the moment, with new technological solutions being introduced to counter the occurrence of unreported retail purchases, including new sales tracking software, and implementing GPS based systems to track the import and export of goods.

Earlier this month the FRB also announced that it has entered into new dialogues with the UK’s HM Revenue and Customs to receive the technical assistance and training needed to improve the efficiency of the country’s tax administration system.
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