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Aftab Maken
The Federal Board of Revenue (FBR) has decided to tighten its grip on individuals conducting financial transactions that exceed the income declared in their tax returns.
FBR Chairman Rashid Langrial emphasized that taxpayers who underreport their income will be identified and brought into the tax net using an advanced algorithm-based system.
During a meeting of the National Assembly’s Standing Committee on Finance, chaired by Syed Naveed Qamar, discussions were held on the Tax Amendment Bill 2024. Chairman Rashid Langrial briefed the committee that banks would be required to share taxpayer income and turnover data with the FBR based on their national identity card information.
Banks will also be instructed to report any discrepancies where a person’s transaction volume does not align with the data available with the FBR. While banks will maintain customer confidentiality, the algorithm-based system will identify individuals conducting high-value transactions, allowing the FBR to bring them into the tax net.
Chairman FBR Rashid Langrial pointed out that many individuals underreport their income in tax returns and wealth statements. However, they will now be monitored and flagged if their financial transactions indicate a higher income than declared.
During the meeting, committee member Mirza Ikhtiar Baig highlighted concerns regarding businesses that frequently conduct daily cash transactions ranging from Rs 10 million to 20 million for payments and purchases. He warned that placing restrictions on such transactions could disrupt business operations.
In response, Chairman Rashid Langrial clarified that while banks would not block transactions, they would be required to report them to the FBR for further scrutiny.
The Standing Committee on Finance, based on recommendations from its sub-committee, approved a provision allowing non-filers to purchase property worth up to Rs 5 million for the first time. The government may increase this limit if necessary. However, filers will only be permitted to purchase new properties if the income used for the purchase is declared in their tax returns. Additionally, taxpayers will be allowed to buy property for their parents and children. The purchase can be made using either cash or equivalent assets.
Meanwhile, Chairman Rashid Langrial confirmed that a final decision regarding the vehicle purchase will be made based on the recommendations of the Senate’s Standing Committee on Finance.
Speaking to the media after attending committee meeting, Chairman FBR stated that the decision on vehicle procurement remains on hold until the final recommendations from the Standing Committee are received.
He further clarified that the ongoing visit of the IMF technical delegation is a routine matter and is not related to any economic review or loan program. The visit is focused on technical discussions.
Addressing the construction sector, Chairman FBR mentioned that the task force formed under the Prime Minister’s directive has finalized recommendations for the property sector, which will be reviewed by the cabinet for approval. He confirmed that a relief package for the construction industry is now assured.
He reiterated that the final decision on vehicle procurement will be made only after receiving a response from the Standing Committee, which is still awaited.
