Insertion of Section 175B in the Ordinance
Insertion of Section 175B in the Ordinance: A new section 175B has been inserted in the Ordinance aiming to broaden the tax base through collaboration between NADRA and FBR. Sub-section (1) of section 175B mandates NADRA to share its records or any other information available or held by it, on its own motion or upon application by the Board.
Sub-section (2) thereof allows NADRA to compute indicative income and tax liability on the basis of various expenses, receipts, assets, properties and liabilities etc. using artificial intelligence, mathematical or statistical modeling or any modern methods.
The Board may forward such information to the concerned tax authorities having jurisdiction in connection to the subject matter relating to the information, who may utilize the information for the purpose of levy of tax.
The indicative income and tax liability shall be communicated to the person to whom it relates. Such person shall have the option to pay tax as prescribed. In case of failure to pay such liability within stipulated timeframe, the tax authority shall take action under the provisions of the Ordinance on the basis of the Indicative Income so computed.
If the person against whom the liability has been determined under sub-section (4) of the newly inserted section pays such liability, such payment shall be construed to be an amended assessment order under section 120 or 122(1) or 122(4) as the case may be.
Board is also vested with the powers to make rules for the purposes of subsections (4) and (5) to prescribe the extent of installments, and any relief regarding the penalty and default surcharge, and time limits.
To provide an enabling environment for the joint mechanism the restrictions on provision of information in terms of section 198 have been done away with and the said section is now omitted.
For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/