Business

Glitch at the FBR

Why did FBR need to cut out the check digit from the NTNs at a time when deadline to file tax returns is days away

Editorial September 23, 2015

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One would think that a government, ‘blessed’ with a public that is inclined towards tax evasion, and tax numbers that put it to shame, would take every possible measure that helps it increase tax revenue. Instead, problems are compounded when the governmental arm responsible for collecting taxes is plagued by inefficiency. In the latest development, the Federal Board of Revenue (FBR) ended up removing the last check digit from the national tax numbers (NTN) of the latest tax filers. While the development seems innocuous on the face of it, businesses that are only identified with NTNs on the weekly-updated Active Taxpayer List (ATL) are missing from the data that is at the disposal of commercial banks. This basically means that businesses which have filed their tax returns will still see withholding tax being deducted from their accounts, until the time banks and the FBR sync their ATLs.

The question now arises, why did the FBR need to cut out the check digit from the NTNs at a time when the deadline to file tax returns is just a few days away. Are we to think that the FBR, which has ridden on the back of higher rates of indirect and withholding taxes to increase revenue over the past few months, does not really want to refund the claims? Withholding taxes, in principle, are refunded to a filer when it has been determined that he has paid more tax than he needed to. We are inclined to believe that the government, while serious in its attempts to shore up revenue, is still faced with outdated IT systems, lack of infrastructure and inefficient officials. There is no doubt that the recent measures taken by the government have pushed people with white money into filing tax returns. However, developments like the latest one remind us of the inefficient government machinery and its handicapped infrastructure, which deter the authorities’ attempts to increase revenue. We hope the FBR and banks are able to resolve the issue as soon as possible, which on the face of it seems to be a minor glitch — unless it is meant to harass taxpayers.

Published in The Express Tribune, September 24^th, 2015.

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COMMENTS (3)

Bilal Ahmad | 8 years ago | Reply Yes they are incompetent, not even PRAL but the whole team of FBR. They are in search of revenue but could not even handle the current ones. I have been sending applications emails to FBR from last two months becuase my second name is wrong in ATL but no one is responding. Excise has stopped my new car registration becuase name in ATL is not as per CNIC. I have sent emails to Member IT to chairman but not a single email was replied.

Jameel ur Rasheed | 8 years ago | Reply The glitch could be intentional and I have every reason to believe that it is. The purpose of withholding tax either on transactions or prepaid mobile cards is based on the fact and government's assessment that people are not going to file their tax returns and FBR will get away their income taxes. As per the FBR number some 900 odd thousand people file their income tax return and half of them declare zero taxable income. Now, for instance, number of filers double in any year, IRIS would crash and FBR won't be able to cope with increased traffic on their website. A few years back, a study said that as much as Rs 600 billion is leaked out of FBR. May government should focus on putting corks at the leaks than annoying already over burdened tax payers.

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