Federal Board of Revenue establishes data governance office to enforce the tax laws

The Federal Board of Revenue (FBR) has established a Data Governance Office to enforce the Tax Laws (Amendment) Bill 2024, targeting "ineligible persons," including non-filers, across the country.

According to an FBR notification issued Friday, the Data Governance Office will ensure the implementation of the new tax laws and impose restrictions on economic transactions of ineligible persons.

These restrictions include the purchase of motor vehicles, buying and selling of immovable properties, the sale of securities, and a ban on opening new bank accounts.

The Data Governance Office, created under the Directorate General of IT & DT, will operate according to the approved Data Governance and Information Security Policy of the FBR.

The office will have specified posts and job descriptions to ensure efficient functioning.

The Tax Laws (Amendment) Bill 2024 introduces the concept of "eligible" and "ineligible persons" and imposes restrictions on the economic transactions of the latter.

Following the creation of the Data Governance Office, the chief of data management & governance will oversee the implementation of the Data Governance Policy, data management, and utilization, including analytics.

The chief will coordinate with all wings and field offices of the FBR to provide data according to the governance policy and innovate in data management, including the use of AI and machine learning.

All requests for information and the development of MIS reports from the FBR will be routed through the chief of data management & governance.

The chief of data acquisition & integration will liaise with third parties for data acquisition, identify required data fields, and ensure proper integration to broaden the tax base and mobilize revenue.

The chief will also monitor the flow of data into the FBR system, propose actions against non-compliance, and disseminate usable data to FBR field formations, ensuring its transparent utilization.

FBR Chairman has acknowledged widespread under-declaration in income tax returns, which does not align with the lifestyle of many individuals who buy properties, operate current accounts, make investments, and conduct businesses without hindrance.

Income tax amendments under Section 114C aim to restrict economic transactions by certain persons without explained sources, limit expensive lifestyles, and regulate investment sources for businesses, sole proprietorships, AOPs, and companies. The amendments also aim to limit the scope of operations for businesses without explained sources of investment.