Karachi, April 25, 2024 – In a recent move to widen the tax base, the Federal Board of Revenue (FBR) has been advised to increase the tax rates for residential electricity consumers not listed on the Active Taxpayers List (ATL). The suggestion, forwarded by the Pakistan Business Council (PBC), aims to incentivize tax compliance and generate higher revenues from non-compliant sectors. The current tax policy levies an advance tax of 7.5 percent on monthly electricity bills exceeding Rs 25,000 for consumers who are not on the ATL. Under the new proposal, this rate would be significantly increased to 30 percent for monthly bills over Rs 100,000. This steep increase is part of a broader strategy to discourage tax evasion and encourage registration on the ATL. The suggestion emerged from an analysis of utility and banking data, revealing a stark disparity between the number of registered accounts and actual tax filers. Out of over 4 million industrial and commercial utility connections, only 200,000 are registered for sales tax. Furthermore, there are over 66 million registered bank accounts as of March 2022, which does not align with the significantly lower number of taxpayers. The PBC believes that the FBR should collaborate closely with utility companies, banks, and property registrars to pinpoint tax evaders more effectively. Moreover, there is a recommendation to utilize advanced data mining techniques and artificial intelligence, coordinated by the National Database Registration Authority (NADRA), to further expand the tax net. Under the current regime, both filers and non-filers are subjected to a uniform advance tax rate—5 percent for industrial…