The Federal Board of Revenue (FBR) has warned the tax-avoiders to duly file their returns or face the strict action under the law as the board would be utilizing the data of army sponsored survey to catch the tax evaders.
“We have set the September 30 as deadline for those who avoid to coming into tax net and after the date we would be utilizing the data of the survey conducted in 2000-01 to evaluate tax,” Member Direct Taxes, Asrar Rauf said.
He said the data would be providing comprehensive details of property including houses and shops, adding the government, with the help of army, in 2001 had conducted door-to-door survey of residential buildings and shops to enhance revenue collections and documentation of the national economy.
He said, although the number of taxpayers has been enhanced from 1,797,000 people in 2009 to 2,313,606 people in 2010, there is a huge gap between tax potential and existing tax generation.
Asrar Rauf said that there was also a huge gap between the NTN holders and the total number of taxpayers filing their returns duely, adding that the FBR issued 2,900,000 NTNs.
“There is need to expose those NTN holders who are not paying taxes,” the Member Direct Tax added.
Without commenting on implementation of Value Added Tax (VAT), Rauf said that VAT was a worldly recognizes form of tax which would help enhance the tax net. He said the VAT would complete the chain from factory to distributors to wholesalers to retailers.
He said that under the present mode of taxation, the factories are paying tax which they pass on to the end consumers. However, after the VAT is implanted the tax would be taken from all those falling in the chain.
He said that a negative impression is being created about the VAT and clarified that it would not only help broaden the tax net but also document the economy of the country.
To a question, Rauf said that the floods would have less impact on overall revenue generation as it had mostly hit rural economy and agriculture and livestock which is already exempted from tax net.
He said that most of the taxes are generated from the urban areas, so the collection would be less impacted by these floods.
He said that for the first three quarters, there would be no such impact on tax collection due to devastating floods, however, added that there may be impact on tax collection during the last quarter due to import of cotton.
The floods have destroyed cotton crops and it would have its impact as the country would have to import cotton.
Meanwhile, The FBR collected taxes of Rs 220.308 billion during the first quarter of the current fiscal year, showing an increase of 5.1 percent over the corresponding period of last year.