Aug 21 - 27, 2000
Almost half of the work relating to the initial
exercise of tax survey in 13 major cities is yet to be done, the
official of Central Board of Revenue (CBR) are more than happy as they
have detected massive income tax evasion by those who have declared
their assessable income through their tax survey forms.
Scrutiny of the forms already received by the tax
authorities reveal that more than half of the taxable income earning
population of posh localities of 13 major cities have never filed a tax
return, a senior official of the CBR confided with this correspondent
adding "we never thought tax evasion was of that high level."
In such a situation there should be no problem in adding Rs 100 billion
to the national revenues during the current financial year".
The official source informed PAGE that data analysts
have started submitting reports, to CBR, on figures being fed into their
countrywide system on daily basis from the 13 major cities. These
figures indicate that more than 50% of the residents of posh localities
are found nowhere on the taxpayers lists. The analysis has been
conducted on 25,000 forms as a "sample-indicator" of the
tax-culture situation over the past week, on the forms submitted by
these residents. The minimum taxable income of a person, is Rs.40,000
per annum, whereas, the names of about 13,000 persons forming the sample
have not been found on the Income Tax department's list of registered
persons. "To make sure that the analysis produces 100% correct
results, we scanned the entire rolls and after double-check it was
revealed that 50% have never got themselves enrolled as tax-payers"
People who never got registered as income-taxpayers,
include "a substantial number of those who have revealed their
incomes far above the minimum taxable income". He refused to give
out the number of those who fall in the category of
"tax-evaders" with income between Rs.100,000- 500,000 and
above, saying, let a larger sample of survey come and we will be able to
draw up a category-wise list" for the reporting purposes.
According to CBR figures, 657,748 survey forms have
so far been distributed. The forms distributed in business areas were
356,006 and 301,742 in residential areas. Out of it, 102,444 forms were
received from the former and 130,118 from the latter sector.
Distribution of forms in 90% of the residential areas and 80% in the
business areas has been completed. The forms collected/received back by
the tax authorities comes to about 28 per cent in case of business area
and about 40 per cent from residential areas.
Member income tax, CBR told at press conference in
Islamabad last week that these forms, received from firms as well as
individuals, showed substantial under-declaration of incomes. The
variation came to light when the actual consumption of utilities by
individuals and firms was compared to what has been shown on their
"Notices for evasion are being sent to the
under-declarant. These notices would be based on utilities bills they
have been paying up over the past 12 months and the income tax they have
been assessing. There is a huge gap between the income declarable in
view of the capacity to pay up such bills and the incomes actually
declared", he elaborated.
Variations between declarations and the actual bills
acquired from the utilities companies had indicated that there was an
incalculable black money, and we had never assessed that there was so
much taxable remaind untaxed in the country, he said.
When asked whether the information supplied through
survey forms is immuned from probe, he said. "Survey for
documentation of economy is being conducted for netting new taxpayers
and for detecting under-declaration of stocks, incomes, property and
turnover. This is not the tax amnesty scheme under which declarations
are being made by the citizens. No immunity is available to tax evaders
under the survey". Participating in the press conference member
Sales Tax CBR, Sarfraz Khan said Pakistan Revenue Automation Private
Limited (PRAL) a department of CBR, has got the entire system and record
of WAPDA and gas department to verify the information provided in the
forms. Out of the target of distributing one million survey forms, 90
per cent residential and 80 per cent industrial areas have been covered
whereas the distribution amongst the traders has also been expedited,'
He said the government is in contact with the traders
and soon the matters would be settled with them. "The traders
associations in Karachi and Lahore are even joining the survey teams for
the distribution and recollection of the forms," Sarfraz said. He
admitted that in the cities including Peshawar and Sukkur the traders
are resisting the distribution of forms on the basis of local issues.
Although the repatriation of Afghan national is a national issue in
Peshawar the traders are linking receipt of forms with the repatriation
of Afghan refugees, Sarfraz said adding that such irritants would be
removed soon. He reiterated that the government would restrict itself to
the financial year ending on June 30 and would not go beyond 1999 to
expand tax net as well as to curb under-filing. "But the NTN
holders and new tax payees have to pay due tax and computerized system
would detect under-filling". The government's offer of outside
audit would continue "in case of audit from outside, the government
would pay 50 per cent charges of the approved chartered accountant
companies". Sarfraz added that the previous taxation system that
was based upon estimate is a gone story now. "None of the CBR
officials would be able to make money on the implementation of new
On the occasion, the PRAL chief gave a detailed
briefing on the system of evaluation for National Tax Survey. He said
that PRAL has 1100 officials in its three centres at Karachi, Lahore and
Islamabad for recording the data of the forms. "We have a capacity
of dealing with 25,000 forms daily as one person can enter and recheck
about 50 forms," he said.