Ahmed Shahin
The National Board of Revenue (NBR) in line with a move to prevent fraudulence will scrutinise return files of taxpayers having exempted income or reduced tax rates, sources said.
The decision was taken to examine the authenticity of income shown in tax returns by both individuals and businesses.
There are serious allegations that many taxpayers show fabricated income figures on their tax returns to avoid taxes and create fake assets.
In this connection, they are involved in transferring assets from one sector where tax rate is higher to another having tax holiday or reduced tax rate, an NBR official concerned told this correspondent.
Besides, many taxpayers have their untaxed money legalised through tax exemption or reduced tax rates, he said.
There are also allegations that many tax officials are involved in this process as they help taxpayers conduct their evasions smoothly.
NBR recently formed a committee headed by Rawshonara Akter, member for Taxes Appeal and Exemption. The committee will look into the authenticity of income submitted by taxpayers, on their tax returns, who are enjoying tax holiday or reduced tax rates.
The committee is also likely to monitor the transparency of suspicious tax officials who play roles to go it on, sources said.
NBR, in a bid to encourage both domestic and foreign investments in the country, offers tax holiday in many sectors including industries in Special Economic Zones, lest developed areas, and newly-run industries.
Besides, many infrastructural projects like power plants, expressways and flyovers are also under this facility.
Besides, the exchequer offers tax benefits for some industrial sectors including IT services, IT parks, fisheries, poultry and dairy farming considering the potentials of these sectors.
NBR officials concerned said many taxpayers evade income tax through exchanging their business to and from undertaking the current tax rates imposed on the respective sectors.
Even it was also found that many business firms while enjoying tax holiday or exemption were highly profitable but these became lose-making once the incentive was over, they said.
The taxpayers thus intentionally show fabricated information on their tax return files to avoid tax burden, they added.
The committee will also include respective field officials to carry out its duty to avoid unwanted situation as the income tax ordinance bars to disclose the taxpayers’ files without permission of responsible tax officials.