Islamabad: In line with the government’s motive to broaden the tax base, FBR Chairman Dr Muhammad Ashfaq Ahmed has initiated a huge challenge to plug in tax evasion of Agricultural Income through close cooperation between FBR and provincial tax authorities to ensure that no taxable income goes untaxed and due taxes are paid in respective collecting jurisdiction.
Accordingly, Ahmed has issued a letter to all provincial governments for a proactive collaboration. He has offered to coordinate a technical-level meeting to address the issues relating to taxable agricultural income and curb tax evasion in the national interest.
Ahmed has proposed technical collaboration between FBR and Provincial tax authorities on Agricultural Income which is taxed by provinces and is exempt from Federal Income Tax. Chairman has also highlighted that tax evaders claim Agricultural Income as exempt in FBR returns and do not pay tax to either FBR or Provincial Governments. Income Tax ordinance prescribes that Agricultural Income will be exempt only if Provincial Income Tax is paid on it.
To strengthen the enforcement of tax laws, FBR has extended cooperation to provincial governments by offering to issue a system generated notices to taxpayers who declare Agricultural Income in Federal Income Tax Returns, to duly discharge their tax liabilities with the provinces.
This offer of cooperation by FBR is in the interest of national revenues to ensure that the persons earning Agricultural Income may pay due tax to provinces and that no income goes untaxed by both FBR and provincial governments.