The need to increase the number of taxpayers instead of increasing the tax rate for the taxpayers in order to increase the revenue collection does not need any explanation. Gratefully, the national economy is now being built along these lines if Finance Minister Shaukat Tareen’s statement at the inaugural of the National Sales Tax Return at the FBR headquarters is to be taken as an official policy. He says that out of 220 million, only three million people file tax returns while the number should be at least 20 million. Of those depositing the returns, a majority is of salaried people. He predicted that the changed system will trace and track the tax evaders.
Unregistered or non-filer people would be served with notices about how much their income is and how much tax is due on them. According to the finance minister, people live in big houses, drive around in luxury cars, go to hotels and eat a Rs30,000 meal at a time but do not pay taxes. He also vowed to take effective measures for the collection of sales tax, saying that there are 18 trillion sales in retail, out of which only four trillion is in the tax net.
Undoubtedly, there are a large number of rich people in the country who have been identified, but so far it was not possible to collect taxes from them as there has been no record of their income and a large part of the income taxpayers. However, the head of the Federal Board of Revenue said late last month that a new plan was being worked out to collect taxes from all potential taxpayers.
A comprehensive strategy has been developed to increase the tax base, which is likely to be implemented within a month. The FBR has collected information from about 7.2 million people from banks, service providers and excise and taxation departments and handed it over to NADRA for verification. Similarly, NADRA has also collected records of about 15 million people from its database. NADRA will identify non-filers using artificial intelligence and the final list of potential taxpayers is expected soon.
That will be available by the end of this month. The list will also be released on the FBR’s website for public information and people will be able to verify the accuracy of the information they provide. People would be given time to voluntarily submit their tax returns and come into the tax net, after which legal action would be initiated.
However, taxpayers around the world are also given many special benefits. Direct taxpayers are exempt from indirect taxes. These facilities make people happy to pay taxes. Even if this is not possible in our country immediately, a plan of action must be formulated and brought to the notice of the people. These measures will surely be very helpful in promoting a tax culture.
