The government expects the notices served to 700,000 rich tax evaders would force them to cough up Rs 100,000 each in income tax, adding Rs 70 billion to the tax revenue during the next fiscal year.
An official source said a list of tax evaders had been compiled after focusing on sales tax and income tax non-filers and short filers. He said the wealthy tax evaders would not escape the claws of tax authorities, as all their assets and income were documented and they have no other option other than paying up.
“The government is aggressive about its taxation policy, but its allies do not agree to the implementation of the reformed general sales tax,” he said, adding that the government would now have to work on the removal of exemptions.
Pakistan’s tax system is based on direct tax on income and indirect tax on consumption. The tax on consumption increases inflation and hurts the poor, therefore, the government should improve its tax collection on income, the official said.
“Only through documentation of the economy will we be in a better position to identify the rich who are evading taxes.”
He said the Federal Board of Revenue (FBR) had detected Rs 25 billion in short deduction and payment of withholding taxes, while 200 FIRs had been registered on the detection of Rs 26 billion in irregular input adjustment in sales tax cases.
Due to the enormous cases of short filing, audit was reintroduced and 3,577 cases have been completed.
On the recovery efforts for arrears, he said measures were under implementation to recover arrears of tax demand of Rs 131 billion, including income tax of Rs 83 billion, sales tax of Rs 38 billion and customs duties worth Rs 10 billion.
The government has revised the tax collection target for the current fiscal year from Rs 1,667 billion to Rs 1,588 billion.