Tax experts doubt the capacity of the Federal Board of Revenue (FBR) in taxing 169 'big fish', saying that the spirit of doing so will die down soon after passing through a string of legal pre-requisites. While defending the government's amended finance bill on Wednesday, Finance Minister Asad Umar announced that the action has begun against those 'big personalities' who have still not bothered to become tax filers.
"As many as 169 such people have been issued notices," he said. "No one should think that they will escape unscathed. This state is not so weak that it cannot catch you. Those who have conservable funds in banks, their details will be obtained," he added. Tax practitioners wondered as to how the government can bring in more people into the tax net when it has miserably failed to issue notices to the National Tax Number (NTN) holders who are not filing their returns for years. They blamed the automated tax system for the failure, saying that the data operators are non-technical staff with no clue as where the job should start from. Prior to automation, they added, the manual record was well-maintained the record keepers and the concerned units had exact idea of return filers and their assessments. Meanwhile, a separate file was maintained under the title of 'miscellaneous' carrying order sheets and other relevant documents of a taxpayer. However, a hotchpotch centralization of the data has played havoc with the system, which has not been overcome till date. The FBR was fully automated in 2005 during the regime of President Pervez Musharraf.
Similarly, they pointed out that any easy access to the centralized data has opened up another window of corruption for black sheep of the Board, who threaten taxpayers of issuing notice, a trick that works and taxpayer grease the palm to avoid a notice.
Commenting on issuance of notices to 169 rich non-filers, they said the objective of amplifying this information is to play to the gallery and no tangible effect is likely to take place on ground. As a matter of fact, only the average taxpayers and industries file their returns regularly, otherwise the FBR collects over 70 percent of its revenue through indirect taxes.
Meanwhile, tax practitioners have also criticized the government's retreat on its earlier announcement of letting non-filers to purchase cars and properties. The Finance Minister, during his speech, has also announced that the restriction on non-filers on the purchase of cars and land is being reinstated. The only exemption would be extended to the Overseas Pakistanis, buyers of motorcycles and rickshaws within 200cc engine capacity, and widows only to the extent of inherited properties.
They said anyone purchasing a car worth Rs2 million is charged with a tax of Rs 300,000 and the government should immediately charge it on any purchase until the buyer proves that he is a filer of tax return.