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
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.
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.