PTBP Web Desk
The Federal Board of Revenue (FBR) in Pakistan has introduced a new Data Governance Office. This office comes as part of the enforcement of the Tax Laws (Amendment) Bill 2024, aimed at curbing tax evasion and fostering a more transparent tax system across the nation.
The FBR issued a notification on a recent Friday, detailing the establishment of this office under the Directorate General of IT & DT, specifying posts and job descriptions in line with the approved Data Governance and Information Security Policy. The primary role of this office is to ensure the implementation of the newly amended tax laws, which now categorize taxpayers into eligible and ineligible persons.
Ineligible persons, particularly non-filers, will face stringent restrictions on their economic activities. This includes prohibitions on purchasing motor vehicles, engaging in the buying or selling of immovable properties, trading in securities, and even opening new bank accounts.
Chief (Chief Data Management & Governance): This role is pivotal in implementing the Data Governance Policy. The Chief will oversee data management, utilization, and analytics, ensuring coordination with all FBR wings and field offices. The use of Artificial Intelligence (AI) and Machine Learning (ML) in data management is also part of their mandate.
Chief (Data Acquisition & Integration): Tasked with liaising with third parties for data collection, this Chief will identify necessary data fields, ensure efficient data integration for broadening the tax base, and monitor data flow into the FBR system. They are also responsible for proposing actions against non-compliance and ensuring that data is used transparently within FBR formations.
The FBR Chairman has openly acknowledged the issue of widespread under-declaration in income tax returns, which starkly contrasts with the lavish lifestyles of many individuals. This amendment under Section 114C of the income tax laws targets those whose economic transactions do not align with their declared income sources. The restrictions aim to limit lavish expenditures, investments, and business operations without clear, explained sources of income, thereby pushing for more honest tax filings.
This initiative not only aims to increase revenue but also to encourage a culture of tax compliance among the populace. By classifying and restricting transactions based on tax status, the FBR is setting a precedent for how tax systems can leverage data governance to enforce legal compliance.
The move could lead to significant changes in how businesses operate, especially those that have been functioning under the radar with unexplained sources of investment. Small businesses, partnerships, and even large corporations will need to reassess their financial transparency or face operational limitations.
