According to newspaper reports, the Federal Board of Revenue (FBR) is envisaging an ambitious plan to broaden tax net and has sent income tax notices to 300,000 potential taxpayers in line with a condition of the International Monetary Fundto ensurethe achievement of $6.67 billion loan.
The IMF has already revised FBR’s tax collection target from Rs2,810 billion to Rs2,756 billion for the current fiscal year, but the board has already issued notices to 139,110 potential taxpayers.Besides, the FBR has sent notices to 75,000 taxpayers who had failed to file income tax returns during the current fiscal year. The board has received very grim response to its tax collection efforts as only 800,000 filed returns during the current year despite repeatedly extending the deadline. The board has sent tax notices to the holders of National Tax Number who had filed their returns last year but failed to pay taxes in the current fiscal year. The government will wait for one month to get a reply to its notices after which ex-parte proceedings will start against them. At least 20,000 new taxpayers have been registered and filed their tax returns while a campaign has been started to collect GST from 25,000 large retailers and over 1.3 million small retailers. The FBR has also started collecting data from multiple sources such as ownership of properties and vehiclesas well as record about international travel by an individual. Therefore, a processes has been started to merge the National Tax Number system, covering 3.6 million individuals with the Computerised National Identity Card database that covers about 150 million individuals. There are inherent and structural flaws in the implementation of the tax laws and system is needed to be improved and tax reform commission is already working on it. A transparency and accountability process within the FBR is the need of the hour while introduction of tax culture attached with various incentives is also necessary.
Discrepancies in sales tax invoices,a fair tax collection mechanism and issue of fake invoices are major areas of concern from the taxpayers’ point of view. A little mistake or discrepancy in the tax collection system can ruin a businessman of his lifetime efforts.
The country is in the grip of terrorism and repeated incidents of bombing has shaken the confidence of the business community on the country’s security institutions. A major Sui gas pipeline has been blasted and gas supply to various cities in Punjab has been suspended. The industry is already facing acute gas and electricity shortage and any government pressure on the businessmen will bring more harm than any good to the industry.
