The federal government may introduce a presidential ordinance to provide record of existing three million taxpayers to the National Database and Registration Authority (NADRA) for the purpose to increase tax collection, but it may compromise privacy of the people.
NADRA role in increasing tax collection ?
The NADRA – the body set up to only maintain citizens’ database – does not allow the authority to involve into the process of increasing tax collection, which should be the sole right of the Federal Board of Revenue (FBR).
Sources in NADRA told the newspaper “The Express Tribune” on Wednesday that the FBR and NADRA were collaborating to make a legal amendment to the Income Tax Ordinance to relax a clause that restricted the FBR from sharing information of income tax return filers to another independent authority.
They added amendment drafted to change the existing Section 216(3) for sharing the income tax return and wealth statement of taxpayers with NADRA.
“The Artificial Intelligence engine would determine tax liabilities based on data of registered and unregistered persons and standard deviations would be minimum only when filers and non-filers data is available for analysis,” said NADRA Chairman Tariq Malik while explaining to media.
FBR Previously shared data with NADRA !
According to NADRA sources, that in 2019 the FBR had already handed over the tax record of income tax return filers for the period 2014 to 2018 to NADRA. But the tax machinery was avoiding to do it again, the media sources added.
Presidential Ordinance draft ready ?
To resolve the issues of the FBR, the government has introduced a draft presidential ordinance, said the media sources. This presidential ordinance may also resolve some of the omissions in the Finance Act that the National Assembly approved last month, which includes banking sector amendments.
Media Sources disclosed that the FBR had already handed over withholding tax statements of unregistered persons to NADRA but FBR was reluctant to handover information of income tax return filers for 2019 and 2020.
What FBR Spokesperson reveals ?
According to media, FBR spokesman Syed Nadeem Rizvi said that in 2019 “information was shared with NADRA under clause kb of Section 216(3) of the Income Tax Ordinance”. However, the clause kb does not permit sharing the income tax return filers’ data.
According to Sources, said the Law Division also gave a clarification that the FBR could only share non-registered persons’ tax record with NADRA in light of clause 216(3) (kb). But, the FBR has already shared registered persons’ tax record with NADRA about two years ago.
“NADRA has not shared with the FBR the outcome of data provided to it in 2019,” replied Rizvi while responding to a question. He also said that “presently the FBR is not working on any ordinance”.
But the FBR has already prepared a draft of the ordinance and the FBR had a plan to issue it last week but did not issue due to other engagements of the finance minister.
Most Important !
Most important here is a fact that for the last almost a decade, NADRA has been claiming that it can help achieve the objectives of broadening the tax base and enhancing the tax collection through artificial intelligence-based mathematical models. Currently, the tax authority and government including NAB should take benefit from this source to take maximum benefit in tax collection and enhancement of tax base.
According to media news, a meeting was also held at the NADRA headquarters on Wednesday to finalize sharing of information by the FBR and the enforcement mechanisms to take action based on NADRA’s point.
Before the approval of FY22 budget, the National Accountability Bureau (NAB) asked the government to provide the access to local and offshore tax records of all politicians, bureaucrats and their families by introducing new legal amendments, according to media reports.
Section 216 restricts the FBR from the disclosure of information by a public servant but its sub-section 3 provides certain exemptions. So, the government now desires to amend sub-section 3 to allow NADRA to get access to the taxpayers’ record.