Widening the tax net: Revenue automation body, NADRA to merge

Highest ratio of gap in taxation is in the income tax area: FBR .

ISLAMABAD:

In order to improve the tax to GDP ratio and expand the tax net, the federal government has decided to merge Pakistan Revenue Automation Limited (PRAL) with the National Database and Registration Authority (NADRA).

PRAL is currently working as a subordinate organisation of the Federal Board of Revenue (FBR).

According to a document available with The Express Tribune, FBR had prepared a comprehensive plan to bring people who do not pay tax, despite earning a taxable income, into the tax net. FBR was linked with NADRA to detect non-tax payers by using their extensive database.

According to the document, the FBR chairman said this collaboration between FBR and NADRA had produced good results and the bureau had identified 33,000 people who own a car, a house and have a foreign bank account.

The bureau also marked 786,000 persons who frequently travel abroad and the board will bring all these non-taxpayers into the tax net.

The document read that keeping in mind these results, it was decided that PRAL should be merged into NADRA so that the tax-GDP ratio could be increased, and the tax net expanded.

The document mentioned that the highest ratio of gap  in taxation in Pakistan was in the direct tax (income tax) sector.

Published in The Express Tribune, May 18^th, 2011.