Assessment Function has been Outsourced to NADRA
Assessment Function has been Outsourced to NADRA via Section 175B (4) and (5): As if the above wasn’t sufficient enough for FBR to catch a tax dodger, the Amendment Ordinance has also introduced a provision whereby NADRA has factually been assigned to carry out the assessment proceeding against the tax payers whereby it has to compute his taxable income and income tax liability.
It has been provided that NADRA will employ its (a) Artificial intelligence (b) mathematical and (c) statistical modelling for the purpose of the above indicative assessment.
Based on the above assessment by NADRA, FBR will do the most critical job to notify the target person about his case details finalized by NADRA and has been given the privilege to give option to the taxpayer to pay the tax either in lump sum or in installment, within a given time period either with compromised terms including discount and pardon to Penalty and Additional Tax or not.
A plain perusal of the newly introduced amendments reveals a mechanism, which is completely unheard and unprecedented whereby one organization will carry out the core job of the other organization.
It is, however, what is supposedly intended by the introduction of this Ordinance, what still needs to be looked for is the assumption of the rightful legal jurisdiction for the assessment without making it contentious and prone to litigation.
It merits a mention that many attempts to broaden the narrowed tax base in the country have been made earlier as well and that too with huge data base of Banking information available country wide, which somehow never resulted in any tangible or notable increase in tax filers.
This joint effort with NADRA can be viewed as a necessary but a desperate measure and by any means should be ensured to be successful.
Lastly, after omission of clause (kb) of Section 216 of the Ordinance, one can wonder as to from where NADRA would get the information of citizen to identify that the person has either not shown the identified income or asset in its wealth or return or has shown it at an inaccurate value.
For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/