ECONOMICS - TURNING THREATS INTO OPPORTUNITIES (Broadening Of Tax Base)

Broadening Of Tax Base
Civic Sense has never been part of our primary and secondary school syllabus although, nowadays good private schools are teaching this as part of their syllabus. Similarly, Federal Board of Revenue need to start negotiation with Ministry of Education to incorporate basic income, sales and excise tax computations as part of the syllabus of Mathematics while a considerable part of economics syllabus need to be negotiated for incorporation of basic rationale of direct and indirect tax code with specific reference to the names of the laws. Further, Income and Sales Tax Practitioner certificate need to be given to only those graduates who have studied corporate and tax laws of Pakistan as part of their syllabus being two full-fledged subjects instead of a mere part.
In furtherance, a new member Member Broadening of Tax Base be devoted. The member needs to be equipped with appropriate work force and work in close liaison with DG Withholding Taxes. The prime responsibility of such member may include liaising with various chambers and local association of various segments of businesses association to identify inducement for tax registration. The issue of new registrants prior years tax issues may be dealt within the panorama of section 120A and 146B. However, it is also suggested that the salaries of such staff be compensated through potential tax recovery also in the shape of bonus on realization of tax. The scope of such member should include direct and indirect tax code.
It is strongly suggested that the withholding tax statements under section 165 of the Income Tax Ordinance, 2001 be analyzed carefully. The NTN number column needs to be checked with NTN database to identify potential new taxpayers. This would help in identifying non-filers of return of total income and sales tax returns. Further exercise should also be extended to PACCS database. Moreover, the sales tax registration numbers should be replaced with Taxpayer Identification numbers which will be one point of identification.

Article courtesy of Muhammad Ashraf