More than a 100 Pakistani Parliamentarians evade income tax by not registering themselves with the Federal Board of Revenue (FBR), a report suggested on Thursday.
As per the report, out of 1,170 MPs, 161 are in violation of tax laws as they have not paid their due income taxes or filed any tax returns. Hence, they owe assets worth Rs35 billion. Some of these MPs are not even registered with the tax authorities.
Official records show that these MPs are on the ‘in-active taxpayers’ list’. Four MPs, who are not active taxpayers, have purchased properties collectively worth millions of dollars in Dubai, Norway and London in the last decade.
Around a dozen among them have had declared businesses namely construction companies, petrol pumps, etc. in the country.
In an examination of the official documents that at least 103 MPs have collective assets worth Rs8 billion, but they don’t pay their taxes actively, while a few dozen are not registered as FBR taxpayers.
As many as 76 of these 103 MPs are from major political parties and two hold a minister’s portfolio in the federal cabinet.
More than 30 female MPs have financial assets mostly attached with their millionaire husbands. They are not filers and are not even registered as tax payers with the FBR. Nearly three dozen MPs have assets worth over Rs100 million each. As many as 12 MPs own assets of over Rs500 million each presently. But these MPs are not active taxpayers.
The Parliamentarians Tax Directory for the fiscal year 2018 did not carry a tax record of around 323 of the total 1,170 MPs. As many as 847 MPs collectively paid around Rs1.6 billion in taxes for the year 2018-19, according to the FBR directory. The directory carries tax credentials of total 1,008 MPs, while tax columns of 161 MPs have been left blank and some names were missing from this important official document.
The federal government has yet to release MPs’ Tax Directory for theju years 2019-2020 and 2020-2021. These revelations have come at a time when tax authorities have launched a campaign to enhance the tax net, urging citizens to share information about assets held in Pakistan or abroad.
Under tax laws, they are required to file their returns and get registered with the FBR. This list includes MPs from the PTI, PMLN, PPP, MQM, JWP, BAP, ANP, JI, JUI-F, JUI-F Nazriati, MMA, Pk-MAP, BNP and independent MPs.
Tax experts say that the amount of tax on income utilised to create those assets estimated at Rs8 billion must be in multiple millions. They believe taxes between Rs800 million and Rs1 billion could be generated by the authorities for the past three years.
Tax evaluation suggested that if an individual earning annual taxable income of more than Rs40,000 (Rs600,000 in case of salaried individuals) is supposed to file return of income under Section 114, read with First Schedule of Income Tax Ordinance, 2001.
Non-filing of return and wealth statement is a violation of Sections 114 and 116. Section 114 also stipulates obligation for filing of return for various other criteria, even if an individual owns an immovable property of 500 SQY or a motor vehicle with an engine capacity above 1000CC amongst others.
It seems the FBR has turned a blind eye to the tax evasion by MPs. Despite repeated requests for their comments from Geo News, the FBR has chosen to remain silent on the issue. This correspondent made repeated requests via emails, WhatsApp and text messages to the FBR spokesperson who said: “We are barred by confidentiality laws.”
Ashfaq Tola, a tax expert, said: “The Income Tax Ordinance mentions punishment of MPs who are not registered with FBR; it has to proceed against these MPs for not being registered and being filers.”
Tax authorities could put such MPs on notice under Section 111 of Income Tax Ordinance, Tola said.
It is pertinent to note that the FBR did not entertain multiple requests filed under RTI laws by this correspondent and did not respond to the Pakistan Information Commission’s order.
