• Government allowed FBR to take extreme steps to broaden the Tax Base
  • Additional Advanced Income Tax introduced on Electricity Bills

The government has added seven new measures to expand the tax base in accordance with the Tax Law Ordinance 2021 (third amendment).

Under the new section 114B of the 2001 Income Tax Ordinance, the government has the power to issue a general income tax ordinance for individuals who are not part of Active Tax Payers List, but are required to file a return under the terms of that ordinance.

The said amendments now allows FBR Commissioner to disconnect mobile phones sims, electricity and gas connections in cases where person is required to pay/file taxes but is not part of Active Tax Payers List.

Firstly, Under the Tax Act 2021 (Third Amendment), FBR has been authorized to disconnect gas and electricity connections to individuals, including Tier 1 merchants who are not registered under section 3 (9a).

Second, the Government increased the fine for Tier 1 retailers not covered by Article 3 (9a).

Third, the FBR was authorized to discontinue gas and electricity connections to people, including Tier 1 retailers, who are not or are not registered under Article 3 (9a).

Fourth, the FBR established additional Advance Income tax rates for industrial and commercial gas and electrical connections of unregistered persons (amendment SRO 509 (I) / 2013 of 12.6.2013).

Fifth, the government has included the “steel sector” in Clause 24d to provide a reduced minimum rate for distributors, resellers, subcontractors, wholesalers and retailers on par with the cement sector.

Sixth, the FBR is authorized to disable mobile phones / SIM cards and disconnect electricity and gas connections rom those required to report.

Additionally, NADRA will share information with FBR to expand the tax base. This will help FBR calculate estimated income of Individuals/Retailers, and identify potential tax evasion.


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