B Mirror Report:  The National Board of Revenue (NBR) will identify around 8 million individuals who have not filed income tax returns and issue notices through an automated digital system, said NBR Chairman Md. Abdur Rahman Khan.

Speaking at a pre-budget discussion held at the NBR headquarters on Sunday (April 26), he said that out of 12.8 million TIN holders in the country, only about 5 million are expected to file tax returns. The remaining individuals will be identified as non-filers through integrated e-TIN and e-return databases.

The chairman said the system will automatically generate a list of non-filers and send them notices without manual intervention. If taxpayers still fail to submit returns after receiving notices, tax inspectors will be deployed to assess their income and expenses.

He also said that the manual selection process for tax audits has been completely stopped and replaced with a risk-based automated audit system. For the 2023–24 tax year, about 15,000 cases were randomly selected in the first phase, while more than 60,000 cases will be selected in the second phase.

According to him, the entire process is system-generated to ensure transparency and reduce human interference.

On value-added tax (VAT), the NBR chief said 600 entities were selected for audit based on 20 criteria, while a joint audit system has been introduced for large taxpayers, involving both income tax and VAT teams.

He noted that VAT registration in the country remains very low, with fewer than 800,000 registered entities, which he described as inadequate. Efforts are underway to simplify the system and expand VAT coverage.

He added that new VAT payers may not need to file monthly returns and could instead pay a fixed annual amount through mobile phones or debit and credit cards without facing extensive paperwork.

To prevent tax evasion, misuse of bonds, and underreporting, the NBR plans to introduce QR and AR code-based tracking systems for manufactured products. Initially applied in the tobacco sector, the system will later be extended to bottled water, beverages, soap, shampoo, and even snack items.

The chairman also said the government plans to use citizens as whistleblowers in combating tax evasion. Consumers will be able to scan QR codes to verify whether taxes have been paid on products, and those reporting violations may receive rewards while offenders face penalties.

He expressed confidence that increased digitalization would reduce harassment of taxpayers, broaden the tax net, and ease the burden on compliant taxpayers.