According to a study more than 60% of Pakistan’s last cabinet and two-thirds of its federal lawmakers did not pay taxes in 2011. DESIGN: FAIZAN DAWOOD
The Federal Board of Revenue (FBR) has set up a ‘Central Verification Cell Election 2013’ to identify tax defaulters and help the Election Commission of Pakistan bar defaulters from contesting the May 11 general elections.
The cell, established on Monday, would verify the tax details of the candidates within 24 hours aimed at fast-tracking the scrutiny process and facilitating the ECP in alienating tax defaulters from taxpayers, while remaining within the time-frame allotted for the scrutiny of contenders.
However, concerns have been expressed that the FBR and the State Bank of Pakistan may not be able to alienate the defaulters due to constraints. The verification cell has been established under an understanding between the ECP, SBP and FBR.
The move came on the day the Supreme Court admitted a petition of Pakistan Peoples Party co-founder Dr Mubashir Hasan, fixing it for hearing today (Tuesday). Dr Hasan has pleaded the apex court to empower the ECP to bar loan and tax defaulters from contesting the elections.
The Pakistan Revenue Authority Limited (PRAL), a subsidiary of the FBR, has developed software to undertake the assigned task of the ECP for verifying the tax details of contesting candidates of the upcoming polls.
According to a study, Representation Without Taxation, more than 60% of Pakistan’s last cabinet and two-thirds of its federal lawmakers did not pay taxes in 2011. Pakistan has one of the lowest tax-to-GDP ratios in the world, estimated at 9.2%. Only 800,000 out of 180 million citizens pay taxes, including roughly 500,000 salaried individuals.
Among all the lawmakers in the upper and lower houses of Parliament, 67% failed to file tax returns in 2011, according to the report. It also found that 78 members of parliament are still not registered with a national taxation number.
The FBR has asked its Directorate of Intelligence & Investigation Inland Revenue to chalk out a strategy to manage the task of verification of contestants’ tax details. Officers have been assigned to keep track of information called from each Regional Taxpayer Office all around the country all the time as the FBR’s team would have to respond to the ECP within 24 hours.
On this account, the FBR has placed Standard Operating Procedures to execute its assigned task. The ECP developed computerised portals which would have access to FBR’s team.
The PRAL has prepared detailed strategy and software to combat the challenge and further instruction would come from its officials.
Published in The Express Tribune, March 26th, 2013.
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Seems very good on paper but in practice it will require herculean efforts in a very limited time frame. And who will define TAX DEFAULTER? 1. One who has not paid any tax and being issued notice to explain. 2. One who has paid tax but deemed inadequate by FBR 3. One who has already gone to court regarding tax notices.
The case with bank default is 10 times more complicated. We just dont have the single minded determination and political will to go thru.
Anyway best of luck to ECP