Central Board of Revenue (CBR) urged to identify those sectors, which have traditionally low compliance into tax net for expanding tax base. According to proposals made by several senior tax officials for 'strategy to expand the tax base.'
the CBR was suggested to identify and bring into tax net sectors traditionally having low tax compliance, eg lawyers, jewellers, estate agents, transporters, general medical practitioners, dealers in mobile phones, computer CDs etc.
They also recommended the CBR for expanding the tax base classes of persons, who are enjoying tax exemption, for instance doctors working in rural areas, fish, poultry and dairy farms, non-professional writers.
They said that voluntary payments had emerged as one of the leading components of income and corporate taxes in the recent collections of the CBR. The voluntary compliance should be more promoted through taxpayer facilitation and education also effective deterrence in the form of efficient audit and certainty of penalties for defaults and through media campaigns.
They stressed upon complete documentation of economy to improve revenue directly. It is suggested that there should be incognito survey of markets and residential areas for potential taxpayers.
They called for the creation of an effective utilisation of database of all immovable property transaction; including agriculture land, motor vehicles, telephone subscribers, allotment/transfer of stocks and shares and club membership etc.
The utilisation of withholding taxes should be treated as documentation rather than tax collection, tax officials suggested. They also added that CBR should levy higher withholding tax rates for non-NTN holders. They proposed that tax exemption should be reduced and a uniform tax law for all sectors of economy should be prevailed.
There should be reduction in stamp duty rates, especially on transactions of immovable properties to encourage documentation at correct values and effective curbs on benami transactions. They said that simplification of tax law and procedure needed for removal of all ambiguities. And send clear message to the taxpayers that any wilful defaults in payment of taxes would be dealt with effectively. Effective checks required for preventing misuse of tax incentives on foreign remittances.
Statement regarding break-up of sales to be made obligatory for manufacturers, distributors and wholesalers. Same as, purchases to be made obligatory for retailers.
Officials suggested that percentage of tax collection should be used for taxpayers benevolent fund and taxpayers should know how the tax money is spent and how he is the ultimate beneficiary. CBR should adopt uniform policy, free of anomalies and for long term basis, tax officials suggested.