FBR urges joint effort with provinces to close agricultural income tax gap

ISLAMABAD: The new FBR head has proposed a close collaboration with provincial governments in order to better collect agricultural income tax in line with the centre’s resolve “towards broadening of tax base and documentation of economy”, ARY News reported Tuesday.

Chairman FBR Dr Muhammad Ashfaq Ahmed has proposed “a 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”.

In an attempt to “plug in tax evasion of agricultural income”, Chairman FBR Dr Ahmed issued a letter to all provincial governments for a proactive collaboration.

Federal Bbureau of Revenue Chairman 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.”

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The tax evaders claim agricultural income as exempt in Federal Bbureau of Revenue returns but do not pay tax provincial governments as well, the letter said.

Income Tax ordinance prescribes that Agricultural Income will be exempt only if Provincial income tax is paid on it.

To enforce of tax laws, FBR says it has extended cooperation to provincial governments by offering to issue system-generated notices to taxpayers who declare agricultural income in federal Income Tax Returns.

This will in turn discharge their tax liabilities with the provinces.