In addition to this, notices have been sent to rich people in order to bring them in the tax net.
The total tax demand created through all these initiatives is around Rs31.2bn and the remaining will be recovered after completion of the legal procedures besides bringing these individuals and entities into the tax net.
The drive has also helped the Federal Bureau of Revenue in receiving 540,000 additional tax returns in TY18 till May 31. The total income tax return has reached 1.92 million for the tax year as against 1.38m in corresponding period last year.
This figure may go up as government has extended the last date for filing of tax returns for TY18 until June 30 as part of the tax amnesty scheme.
As part of the broadening of tax base initiatives, a senior tax official told Dawn that between July-April, 206,318 new taxpayers have been added to tax rolls, who paid more than Rs185m.
Explaining further, the official said that 260,000 SMS notices were issued to non-filers in TY17 and of these, 240,000 were also issued emails and asked to file returns. Among them, 50,682 returns were enforced against 76,568 notices issued to date.
Official data available with Dawn show that FBR has initiated 6,451 cases of HNWI during the period under review. Of these, 2,745 taxpayers were made to file their returns along with a collection of Rs1.432 bn. The total tax demand created was Rs2.215bn from these taxpayers.
“This is an ongoing exercise and more notices will be issued to HNWI”, a senior official said.
Tax officials have also taken several enforcement actions under section 175 of Income Tax Ordinance 2001 as well as sections 38 and 40B of Sales Tax Act 1990, which give them the power to enter and search premises as well as post inspection officers on the premises to monitor sales and inventory position.
Using this authority against tax defaulters, the officials have taken action in 373 cases against credible information. The revenue evasion in these cases was Rs7.218bn and out of this Rs3.371bn was recovered.
The break up showed that maximum evasion was detected in sugar and retail sectors. The tax demand created in the sugar sector was Rs3.386bn and out of which only Rs583m was recovered so far, showing meagre recovery from the powerful mill owners.
Contrary to this, recovery from the retail sector is nearly 100pc against the tax demand created – Rs2.519bn recovered versus the target of Rs2.258bn.
The tax demand created from real estate sector was a meagre Rs591m while recovery almost half at Rs382m.
Other sectors had a demand of Rs722m of which Rs148m have been recovered so far.
The newly appointed FBR Chairman Shabbar Zaidi has recently restricted tax officials to seek his prior approval before entering the premises of taxpayers. He also conditioned the prior approval from his office regarding bank account attachment of taxpayers.
But before his order, the data show that regional tax offices (RTOs) used these powers extensively to recover taxes from defaulters.
The Peshawar RTO initiative shows that it has recovered an amount of Rs423.459m with recovery made in the wake of issuance of 141 warrants of arrest to tax defaulters. The other tools used for recovery include attachment of property in 85 cases, vehicles in 44, and 3,060 in bank accounts.
Next area is the identification of HNWI through their activity and upon whom reasonable suspicion exists of non-compliance or lack of full compliance with their tax obligations. The FBR spotted 6,451 such cases and enforced 2, 745 returns through the drive. It also created a tax demand of up to Rs2.215bn and recovered Rs1.432bn from them.
Similarly, FBR has selected 150 cases of high profile individuals where income does not commensurate with life style and shared details with field formations during the last 10 months. On the basis of available data, 38 cases were selected by the respective commissioners for detailed audit.
In seven cases, field formations had already conducted audit/scrutiny and created tax demand of Rs6.554bn.
Through database analysis of withholding statements, 74,321 active live business cases have been identified with their CNIC details sent by FBR to Nadra for addresses. In this regard, 1,024 notices under section 114 & 116 have been issued in the first batch.
Under the offshore initiatives, the country has signed Organisation of Economic Cooperation and Development Agreement for automatic exchange of information and has received accounts information of about 152,000 Pakistani tax residents. Similarly, it has started receiving information in 525 cases from UK relating to investments/rental income of Pakistanis there.
According to a tax official, tax demand to the tune of Rs13bn has been created in offshore cases of which a recovery of Rs6.5bn has been made. FBR has established six Offshore Taxation Commissionerates to handle offshore information at Karachi, Lahore, Islamabad, Peshawar, Quetta and Multan.