Daily Times

KARACHI: The Federal Board of Revenue (FBR) has established a highly specialised unit to deal exclusively with high net-worth tax evaders’ cases on a fast-track basis.

According to a copy of a letter available with Daily Times, the FBR Member Inland Revenue (IR) has approved establishment of the specialised unit which will deal with high net-worth individuals’ cases.

Initially, the officers nominated for the unit have been assigned 20 top cases as an exclusive assignment.

All nominated officers shall conduct hearings on a daily basis, and furnish updated status to FBR directly on the 1st day of January 2019.

Keeping in view the limited human and physical resources at the FBR’s disposal, the heads of the respective field formation shall further categorise cases under Tier-l, 2, and 3 on the basis of the revenue potential involved.

For an effective and efficient handling of high net-worth individuals’ cases, the FBR has prescribed a procedure to follow for unit officers. According to the procedure, the unit officers shall analyse economic activity and other important areas of information received for further proceedings both in the case of filers and non-filers. In cases of filers, cross-matching of information with the declared version, to identify specific discrepancies and risk areas for selection for audit.

Some of the high-risk areas for high net-worth individuals’ cases include declared exempt incomes like gift, foreign remittances, inheritance, agricultural income, and carried forward wealth of previous year without furnishing previous year’s wealth reconciliation and documents of identified assets/sources etc.

In case of complete non-compliance by a high net-worth individual, a complaint shall be registered against the person before the central judge or, in selected cases, the officer in-charge, after administrative approvals, shall directly prosecute the person for non-compliance in proceedings of violation of the provisions of Code of Civil Procedure 1908 (Act V f 1908).

The FBR has already directed all its wings to deal with cases in the following categories on a fast-track basis: cases in which tax related information has been received from foreign jurisdictions, cases identified and circulated by IR operations wing, cases emerging from discrepancy reports generated and circulated by the Directorate General of Broadening of Tax Base (BTB).

Also, investigation reports in mega cases of tax evasion generated by the Directorate General I&I-IR and any other cases containing high-value information or pertaining to high net-worth individuals are to be dealt with on a fast track.

Reportedly, the FBR has estimated Rs37 billion in tax demand from audit of high net-worth individuals, while 373 cases of high net-worth individual evaders who never bothered to file tax returns have been identified.

Published in Daily Times, December 28^th 2018.