A 'Unique Identifier Number' issued by the Securities and Exchange Commission of Pakistan to the companies will be used by the Federal Board of Revenue in place of National Tax Number for bringing 42,000 untraceable corporate entities into the tax net.
Sources told Business Recorder on Saturday that there are around 55,000 companies registered with the SECP. However only 13,000 companies were filing income tax returns. To ensure the filing of income tax returns by these companies, the FBR is considering allocating NTNs to these units on the basis of this 'unique identifier number' of the SECP.
Sources said that the decision is a part of FBR's national strategy to broaden the tax-base in the remaining months of 2007-2008. Under the plan, the board would broaden the tax-base through effective utilisation of database of immovable property transactions, motor vehicles, telephone subscribers, allotment/transfer of stocks and shares and scanning the web pages for companies.
The FBR has also started analysis of the yellow pages for identification of registered entities, whose credentials are available on business directories etc. Sources said the FBR Chairman M. Abdullah Yusuf has directed the Direct Taxes Wing that the gap between 55,000 companies registered with the SECP and 13,000 companies which are filing returns is quite huge which needs to be properly looked into on priority basis. The first step would be matching of data available with SECP and the FBR, he said.
The FBR chairman further directed that income tax department may adopt computerised national identity card (CNIC) as NTN for taxpayers falling within the category of 'individuals'. The FBR chairman also directed the Pakistan Revenue Automation Limited (PRAL) to match the data available with the SECP with their database in corporate cases and dispatch the updated information to the field formations by February 20.
It is worth mentioning that the FBR is trying to trace 42,000 companies on the basis of SECP data for the last many years. The board had reconciled data of companies having NTN with the SECP database to identify companies operating without tax numbers. But, it seemed that the board is still unable to trace these companies.
Anyone can obtain information about a registered company by paying some fee through challan in the bank. The information of company is a public property. Even the SECP regularly dispatches monthly statement on the incorporation of the new companies to the FBR Direct Taxes Wing. It is not clear that why the FBR is unable to co-ordinate with the SECP on this key issue.