UK not using one taxpayer identifier number

A developed country like United Kingdom (UK) is not using one single taxpayer identifier number for customs, direct taxes and value-added tax (VAT), whereas the CBR is planning to have computerised identity card number (CNIC) as sole identification of the taxpayer.
A senior tax official, who visited UK Revenue & Customs organisation (HMRC), told Business Recorder on Wednesday that the UK is far ahead in documentation of the national economy, but there is no single identifier of the taxpayer.
It was surprising for Pakistan's tax officials that over 250 different computer programs were maintaining the data of individual taxes in UK with separate identifier for customs, income tax and VAT. There is no integration of taxes, as one system generates VAT report about a taxpayer, whereas the other system generates an income tax report. A specialised wing analyses both these reports for scrutinising the record of the taxpayer.
On the other hand, Pakistan's tax machinery, which is undergoing massive reforms, has decided to use CNIC as sole identifier for each taxpayer. However, the only problem in Pakistan's tax system is less documentation of the national economy as compared to the UK where receipts are issued on carrying out each and every transaction, officials added.
Sources said that even there is no integration of data for carrying out audit of the taxpayer. The system is co-located where taxes' data is collectively examined by the tax managers.
In UK, there is no specific percentage of audit cases for VAT or direct taxes. The procedure of audit in UK is very clear with the motto, "audit means confirmation/verification of whatever is filled in the return form". The taxpayer has to prove each and every figure declared in the return.
Under the procedure, a team of senior officials identifies the national level risks like probability of tax frauds in the oil sector or mobile phone companies.
For example, if cases of 'missing traders fraud' were detected in the mobile phone business in the UK, following identification of national risk, regional risk in the particular sector is identified.
In UK, they have a realistic approach to go after for high-risk cases. If your case has been selected for audit, but it was not completed even after one year, there may be other high-risk cases in the next year, which would be given priority. The policy to audit the high-risk cases has resulted in proper examination of record of suspected taxpayers.
The risk parameters are not unique and are like the same applicable in Pakistan.
For example, if a taxpayer has not filed return for past two years, certain numbers are allocated to the taxpayer. Similarly, incomplete return form also goes against the taxpayer. Thus, Pakistan's tax system is not far behind the tax systems of the developed countries.
Once a case has been selected for audit, the concerned official of HMRC would contact the owner of the business unit to give time for inspection. The inspector of taxes would visit the business premises on the time given by the owner. But there is no restriction on the number of visits for carrying out audit in the UK as compared to Pakistan where business community makes hue and cry only after one visit of auditor to the taxpayer's premises.
He added that the HM Revenue and Customs (HMRC) was formed on April 18, 2005, following the merger of Inland Revenue and HM Customs and Excise Departments. Direct taxes covered capital gains tax, corporation tax, income tax, inheritance tax and national insurance contributions. The indirect taxes cover excise duties, insurance premium tax, petroleum revenue tax, stamp duty, stamp duty land tax, stamp duty reserve tax and VAT.