In a significant move to enhance tax compliance and broaden the tax base, the Federal Board of Revenue (FBR) has implemented real-time machine-to-machine data integration with the National Database and Registration Authority (NADRA) and is establishing links with other major organizations that hold data on financial transactions. This initiative is part of a broader strategy outlined in the FBR’s 2023-24 report on broadening the tax base, which highlights the use of technology and data analytics, along with continuous monitoring through advanced dashboards.

The FBR has been actively engaging in a strong nudging campaign, sending SMS and WhatsApp messages to high-profile unregistered individuals, urging them to file their tax returns. A media campaign has also been launched to encourage citizens to visit the Malomaat portal and file their returns, further supporting the FBR’s efforts to increase taxpayer registration.

To facilitate real-time data exchange, the FBR has signed Memorandums of Understanding (MoUs) with 28 departments and organizations. The revamped Maloomat portal and the Tax Ray tool have been identified as effective resources for field formations, according to the report.

In a bid to strengthen its on-ground presence, the FBR has established 145 District Tax Offices (DTOs), each designated with specific jurisdiction to broaden the tax base and take action against non-filers. A special committee, led by the Chairman of NADRA and comprising senior officials from both organizations, has been formed to provide recommendations on expanding the tax base. These recommendations are currently being implemented by the FBR.

In a more stringent measure, the FBR has issued instructions to telecommunications companies to temporarily disable SIM cards of non-filers under Section 114B of the Income Tax Ordinance 2001. This move is aimed at compelling non-compliant individuals to fulfill their tax obligations.

The FBR’s efforts have yielded significant results in the tax year 2023, with the registration of an all-time high of 3.6 million new taxpayers. Out of these, 1,780,406 individuals have already filed their returns, marking a substantial achievement in the FBR’s ongoing campaign to enhance tax compliance and broaden the tax base.