FINANCE

 
1- ADDRESSING FRAUD AND FORGERIES IN BANKS
2-
ISLAMIC FINANCE, BANKING AND INSURANCE
3-
PUNJAB EXPANDS TAX NET
 

PUNJAB EXPANDS TAX NET

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About 10,000 traders, 9,500 salaried persons and 261 companies filed their income tax returns for the first time with the IT Eastern Region, Lahore

 

From KHALID BUTT, Lahore
June 27 - July 03, 2005
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Income Tax authorities in the capital of Punjab have brought into tax net 21,500 persons in the outgoing financial year. About 10,000 traders, 9,500 salaried persons and 261 companies have filed their income tax returns for the first time with the IT Eastern Region, Lahore.

Income Tax Commissioner, Eastern Region Lahore Zone-B, Khawar Khurshid Butt, while highlighting the efforts for broadening the tax base, observed that the Central Board of Revenue had given the target of bringing 28,000 persons into master index of national taxpayers during 2004-05. "By mid-June we have added 21,500 persons to the tax-base and are making efforts to exceed the annual target," he said.

The Income Tax officials approached different public and private sector companies and motivated the people to file returns who were paying tax at source.

The IT Eastern Region was assigned the task to broaden tax-base and set up Tax Facilitation Centres in different commercial markets in the city and pursued the traders to join the national tax-net. Consequently, as many as 2,543 traders filed their tax returns at the TFCs in this fiscal year, he added.

It was for the first time that the tax officials went out to the traders and facilitated the members of the business community to file their returns without harassment, payment of fee, etc. The key purpose of the TFCs was to eliminate the role of middlemen (lawyers) and tax inspectors, etc., and to have direct interaction with the traders.

Earlier, the traders were paying around Rs 2,000 fee to the tax lawyer to file returns, but the IT officials accomplished this task without charging anything with the aim to change the tax culture and making the business community realize this changing scenario.

Income Tax Commissioner indicated that 1,000 doctors and officials of public and corporate sectors would be brought into tax-base in the current month. He said that the doctors serving in major public and private hospitals - Mayo Hospital, General Hospital, Fatima Jinnah Hospital, Shalamar Hospital, etc., are willing to join the national tax-base by filing their returns this year.

Khawar Butt pointed out that in Lahore 1,400 doctors were already filing their tax returns while 1,000 more are in the process to submit their returns before the end of this month. The tax base broadening drive would continue in 2005-06 besides new plans are being chalked out to expand the number of taxpayers.

It would be worth mentioning that the Income Tax Lahore Region has received a paltry amount of Rs 758.6 million as income tax along with returns filed by different categories of the taxpayers by January 31, 2005, for the financial year 2003-04. In the previous fiscal the said region had received Rs 1.394 billion along with tax returns filed by the taxpayers by January 31, 2004, for the financial year 2002-03, which clearly shows that the payment of income tax with returns had dropped by Rs 636 million.

 

 

In this fiscal the corporate sector (companies) deposited only Rs.310.333 million tax along with 3188 returns, whereas in the last fiscal the corporate sector had deposited Rs 894.84 million along with 3000 returns. In monetary term, the payment of tax with returns had dropped by Rs 584.51 million while in percentage this slippage is 188 percent. The tax returns, filed by the corporate sector, have increased by 188 percent (3,188 in this fiscal as against 3,000 in last financial year), but there is a hefty decline in the payment of income tax. Similarly, in this fiscal the non-salaried (individual traders/small businessmen) have deposited Rs 295.071 million along with 96,639 returns by January 31, 2005, while in the last financial year a total of Rs 326.568 million were received with 89,786 returns from the non-salaried class. The number of returns in this category had gone up by 6,853, but the payment of tax had declined by Rs 31.497 million.

The Income Tax authorities are of the view that the Universal Self-Assessment Scheme (USAS) has backfired as several taxpayers have paid less tax as they knew their declared income in the return would be accepted by the IT authorities. The tax authorities, however, are of the view that the changing tax environment and increase in the tax-base would lead to better tax collection in the days to come.

SALES TAX

Meanwhile responding to the government efforts to increase the tax base, LCCI President, Mian Misbahur Rehman, has urged the government to abolish Section 10 of the Sales Tax and revive the old Carry Forward Policy.

The LCCI President said that Section 10 of the Sales Tax would open up pandora box for the local manufacturers as the Sales Tax Department has no arrangements to refund the claims of as many as 80,000 tax payers every month.

Section 10 of the Sales Tax would put negative impact on the whole industrial process. He was of the view that for the sake of industrial progress in the country it is important to provide level-playing field to the local industry. This anomaly would hit the industrial process hard, therefore, it is necessary for the concerned department to take immediate action to provide much needed relief to the industry.