ISLAMABAD: Federal Board of Revenue has moved various recommendations to the parliament for broadening of tax base (BTB). These recommendations include provision of required tools along with manpower.
District level setup for broadening of tax base has been proposed.
Tax base is the assessed value of a set of assets, investments or income streams that is subject to taxation, or the assessed value of a single asset that is subject to taxation. Anything that can be taxed has a tax base.
The tax base may refer to that of an individual asset, such as the tax base of a house, or a pool of assets, such as the tax base of all houses in a city. For example, the property tax base of a house is its value. The property tax base of a city is the collective value of all taxable real estate in the city.
Pakistan has narrow base of taxpayers’ vis-à-vis total population and the source of revenue collection is mostly salaried class and huge tax gap exists in actual revenue collection and revenue receipts.
A well placed source at Secretariat of the National Assembly Standing Committee on Finance and Revenue, Friday, told this scribe here that along with package of recommendations for broadening of tax base, FBR has also presented a number of reasons for narrow tax base as well as hurdles in the expansion of tax net.
As per dossiers available with committee, presently, the field formations of the FBR are facing acute shortage of workforce and therefore offices and staff has been given additional charges which results in less priority given to broadening of tax base initiatives.
Moreover, the recommendations and plans reveal that FBR intends to maintain centralized daabase to be jointly used by BTB Directorate, /PRAL, and regular updating of such dateabase. More new source of data will be explored and utilized for creation of central data bank.
He documents elaborate human resource deficiency still persists in Broadening of Tax Base (BTB) and field formations. Similarly, lack of logistic support, difficult and cumbersome procedures, lack of proper and effective enforcement by FBR’s field formation, lack of capacity and motivation to utilize available information, lack of taxpayers’ education and lack of tax culture are main reasons for narrow tax base.
There are certain hurdles in broadening tax base like distrust of people in use of tax money, negative attitude of tax collectors etc. Political will would be required to implement the policy in broadening of tax base of the country. Similarly, there should be cooperation of different government and private agencies in collecting information regarding non-taxpayers e.g. NADRA and banks.
