All commercial consumers of Karachi Electric Supply Corporation (KESC) and Sui Southern Gas Company (SSGC), paying Rs 50,000 and Rs 25,000 annually respectively as energy charges, would be brought under the tax net, sources in the Regional Commissioner of Income Tax (RCIT), Southern region revealed on Tuesday. They said that the tax practitioners had recommended to the government to make submission of National Tax Number (NTN) mandatory at the time of booking seats for foreign travels by air and on sale and purchase of property.
This would give a boost to the efforts being made for broadening the tax net, which presently encompassed only 1.1 million taxpayers about half of whom is salaried class.
The Central Board of Revenue (CBR) had earlier directed that no new car would be booked by the local manufacturers without the NTN of the buyer. This has supplemented the tax broadening efforts.
The department collects information from car manufacturing companies on monthly basis about the buyers of new vehicles and disseminate the information to the tax departments in major cities to find out whether the buyer is paying tax or not.
According to information, collected from one leading car manufacturer in Karachi, about 2,992 cars were sold in March.
The Southern region RCIT issued 50,000 NTNs from July, 2004 to March 31, which is 65 percent of the target of new taxpayers (77,000) assigned to the region during the current financial year. The RCIT hopes to exceed the target of tracing new taxpayers by 15 percent to 20 percent.
In Karachi alone, 35,960 taxpayers were brought under the tax net by March 4 this year. These include 11,700 salaried persons, 18,043 businessmen, 1,012 association of persons (AOP), 593 limited companies, 270 registered firms, 203 unregistered firms and 4,138 others.
The CBR also set up two zones in Karachi and Lahore whose sole job is to collect information from various sources and pass them on to other tax zones, asking them to trace the persons and find out whether they have NTN and are filing tax returns or not.
The department arranged lists of professionals such as doctors, engineers, lawyers and architects and information is being sent to various tax zones to find out their tax liability and persuade them to file tax returns.
The main objective of broadening the tax net is to increase the revenue and reduce tax burden on the existing taxpayers by lowering tax rate gradually.
The Section 14 of the Income Tax Ordinance 2000 provides that any income above Rs 80,000 per year is taxable. All persons, having 250 square. Yards house or a flat in metropolitan, Federal and cantonment areas is liable to tax.
The other tax liable categories are owners of cars, telephones, members of clubs with Rs 500 monthly fee or Rs 25,000 admission fee and foreign travellers, excluding religious travels.