CNIC to serve as tax number from January 1

Published: June 9, 2011
Parliamentarians demand retirement benefits on par with senior civil servants.

Parliamentarians demand retirement benefits on par with senior civil servants.


In a bid to widen the tax net and encourage better documentation of the economy, the government has decided to turn national identity card numbers into national tax numbers from January 1, 2012.

Testifying before the Senate finance committee, Federal Board of Revenue Chairman Salman Siddiqui said that the government had inserted a clause in the text of the finance bill which proposes that the government begin using computerised national identity card (CNIC) numbers as a replacement for national tax numbers (NTN). Once implemented, said Siddiqui, the change would be permanent.

Currently, there are 2.9 million people in the country with an NTN, which is required for any person filing their tax returns. FBR officials say only 1.5 million people file their income tax returns. By contrast, officials at the National Database and Registration Authority (NADRA) estimate that nearly 95% of all Pakistani adults have a CNIC.

The decision to begin using CNICs was made by the government as a substitute to introducing the value added tax, also known as the reformed general sales tax (RGST), which had previously been the government’s primary strategy to help document Pakistan’s large cash-based, undocumented economy, which experts estimate is anywhere between 50% and 70% of the documented economy. The latest economic survey estimates the size of the country’s gross domestic product (GDP) at Rs18 trillion ($210 billion).

Sources inside the FBR say that one of the major reasons the FBR resisted the RGST was because it would remove their powers to issue statutory regulatory orders (SROs), through which civil servants had the power to reduce tariffs on any item or even for a single business, without any supervision from elected officials.

FBR officials say that the government will try to increase its income tax collection by first registering annual sales of businesses across the country. The FBR chairman admits that the government can increase tax revenues by as much as 79% simply by cracking down on tax evasion.

Parliamentarians approve plush retirement packages

At a time when the government is striving to increase the tax base by bringing the richest of the country in the net, parliamentarians, many of whom are accused of paying virtually no taxes, are now eying even more privileges.

The Senate finance committee on Wednesday unanimously recommended giving privileges currently available to the highest ranked retired bureaucrats to all those Senators and Members of National Assembly who have completed a five year term.

These include free medical treatment, access to VIP guest houses, use of VIP lounges at airports, issuance of special passports and permanent access to all government departments and offices. The only thing they did not demand is allotment of two residential plots that all grade-22 officers get on retirement at the expense of taxpayers.

“The Parliamentarians are only demanding respect”, said Senator Ahmed Ali of MQM. He claimed that not all parliamentarians were rich, particularly those belonging to Balochistan.

“Are you not availing perks? Why are you reluctant to give the same treatment to parliamentarians,” asked Senator Ali of Finance Secretary Waqar Masood.

The finance ministry did not give its consent for the proposal and said that it would review the financial impact of such a retirement package for legislators.

Last year, the Senate finance committee approved special post-retirement perks and privileges for former chairmen of the Senate.

For a second consecutive day, the committee also faced quorum problems due to the continuous boycott by opposition senators on the issue of appointing Maulana Ghafoor Haideri of the JUI-F as the Senate opposition leader. Only four members attended the meeting, including the chairman.

The finance committee also unanimously recommended increasing the income threshold for income tax exemption to Rs400,000 from the finance ministry’s proposed Rs350,000. It also proposed to increase minimum wage to Rs8,000 from Rs7,000.

Published in The Express Tribune, June 9th, 2011.

Facebook Conversations

Reader Comments (13)

  • Ghulam Mustafa Chaniho
    Jun 9, 2011 - 8:33AM

    Shame on these people. You don’t do politics to get rich you fool. Politics is holy, its sacred. You don’t earn money or expect returns when practicing something holy. These sort of politicians are a disgrace and blemish on the name of politics and politicians who do politics to serve.Recommend

  • SH
    Jun 9, 2011 - 9:19AM

    What a despicable suggestion. The difference between a career bureaucrat and a one-term parliamentarian is the many many more years spent by the former in public service. Why then should the latter expect “retirement” benefits matching the former??? It makes no sense!! Just when you think our politicians could sink no lower!!Recommend

  • Shamsi Ajanee
    Jun 9, 2011 - 10:08AM

    This is a very good idea.This will help in correlation with NDRA data of bank accounts,property ownership,travels,gun ownership,utility bills etc.

    Tax evaders,start having sleepless nights !!!!.According to tax law,in case of concealment, there is no time limit.So even property purchased with un-declared money in 1965 will be taxed.See section 111 of Income Tax Ordinance 2001.

    Even in USA, Social Security Number is used as Tax number in case of Individual tax filers.Recommend

  • Billoo Bhaya
    Jun 9, 2011 - 10:46AM

    I love you Parliamentarians. I love the way you do it to us again and again. And you know what?? We have started enjoying it. In the words of Kevin Kline in the movie Fish Called Wanda; “go ahead pal, pork away”.Recommend

  • Billoo Bhaya
    Jun 9, 2011 - 11:05AM

    @Shamsi Ajanee:
    You should be worried because you have property since 1965??? What a give away?? What about all the bogus CNICs???? They will be chasing shadows all the time.Recommend

  • Ali M.
    Jun 9, 2011 - 11:13AM

    Actually S.111 states that income not falling under the preceding 5-years would not be accounted for under sub-section 1 of Section 111.

    However, I feel this is a good move and lets hope the extra taxes collected are spent back on the public, rather than on the perks and priviliges of the government.Recommend

  • Jun 9, 2011 - 11:46AM

    @Billoo Bhaya:
    Nadra has Finger print records of all the CNIC holders. Time has come to implement Biometric system for Taxation, for Election voting etc. etc.

    This is a fool proof system and will take care of Bogus CNIC if someone posses as Biometic record is unique and cannot be duplicated.

    I hope Government will start implementing Biometric use for common purposes only including much debated Ration Cards for utility Stores.


    Dr. Saleem Siddiqi

    Johannesburg – South AfricaRecommend

  • Shamsi Ajanee
    Jun 9, 2011 - 1:04PM

    @Ali M.:

    Sorry you are not correct.

    Sub-clause (b) to sub- section 4 of Section 111 was omitted vide Finance Act 2010.

    After the above deletion of section 111(4)(b) , concealed investment,wealth etc even of past 50 years if made through un-explained legitimate money can be taxed u/s 111 of Income Tax Ordinance 2001.
    Tax evaders should start having sleepless nights!!!Recommend

  • Anserali Khan
    Jun 9, 2011 - 1:08PM

    Mr Ali M is wrong

    The section 111 of Income Tax law was changed in 2010 and the section he is referring to has been deleted.
    So after the above change, Mr. Shamsi Aganee is correct.

    @Mr. Bhiloo Bhaya: I think Mr Aganees’ reference to 1965 was just an example of time line.Recommend

  • Saad Durrani
    Jun 9, 2011 - 1:24PM

    Good idea.Recommend

  • Aftab
    Jun 9, 2011 - 2:34PM

    Hit those tax evaders hard, but please, don’t give this money to Military.Recommend

  • Sahir Sheikh
    Jun 9, 2011 - 4:55PM

    FBR has now become the agency I forever wanted it to become. Good going! Murder all tax evaders financially.Recommend

  • Ba Ha
    Jun 9, 2011 - 11:24PM

    This is NOT a good idea. You must be a resident to pay taxes and have a (SIN).social insurance No. To have a SIN you must establish residency for six months at least. Even an untrained person can see the potential for misuse… not to mentions the3rd. Gen super clerks sitting in tax offices of Pakistan. Its just ok as an interim measure if the person wants to establish the rights to pay taxes only. Perhaps the govt should consult the CJP on thisRecommend

More in Pakistan