Authentic tax profiling

Chairman Federal Board of Revenue (FBR), while addressing a press conference, formally launched the online tax profiling system, which will enable 53 million people to check their bank details, properties, utility bills and travel history. This is commendable quantum leap towards the documentation of economy for the purpose of expanding the tax net through progressive direct taxes. It will also discourage the lust for black money and expansion of parallel economy. One of the pertinent objections of leading economist Dr. Ashfaq Ahmad on the “Assets Declaration” scheme of PTI government was that it will encourage yearning for amassing black money and assets and keeping it concealed in the hope of declaring them later for paying nominal rate of tax at the time of announcement tax amnesty scheme.

The innovative system of tax profiling has been put in place with the professional assistance of National Data Base Registration Authority (NADRA). It was the same professionally advanced organisation that provided the data of 3.8 million wealthy people to the FBR in 2010. The multilateral donor agencies sometimes advised and other times exerted discrete pressure on the previous governments of PPP and PML-N to use this available data for broadening the tax base by way of direct taxes instead of increasing the rates of indirect regressive taxes and burdening over and over the compliant taxpayers. But all along the vested interest was given precedence over the national interest. As a public relations exercise, former Prime Minister ShahidKhaqanAbbassi, while giving interview to Bloomberg, said the PML-N government is keen to introduce a system of CNIC based tax profiling. But it proved yet another hollow political slogan and nothing concrete was initiated till the end of his tenure as Prime Minister.

The important feature of online tax profiling system is that anyone, who possesses taxable income and immoveable properties, can request access to the relevant information on the basis of Computerized National Identity Card or cell phone number. A fee of Rs.500 shall be charged for each attempt for access to one’s profile. Built-in-security feature is in place in the online profile system preventing the possibility of intrusion of one person into the data of another.

The history of tax amnesty schemes is replete with dismal failures, including its five times launching during the previous PML-N government. The tax amnesty schemes met a relative success in the governments of President Ayub Khan and General Musharraf. Again in the PTI government the assets legalizing scheme received lackluster response despite the televised appeal by the Prime Minister Imran Khan. Less than 250 people have so far declared their incomes and assets and a paltry amount of Rs.450 million have received in tax deposits. It has compelled the FBR to keep away the figures about assets declarants and tax receipts from the parliamentarians and federal cabinet.

The new system tax profiling will help the sluggish bureaucracy of Inland Revenue Services Department of the FBR to compile a correct data of non-filers to avoid bouncing back of notices for filing tax returns because of incomplete and invalid residential addresses. It was reported on the electronic media that in the province of Sindh notices have been sent to over 13000 people. However, it remains to be seen whether bulk of the notices for filing tax returns could be delivered by Courier Services or large number of them return undelivered. Tehrik-i-Insaf government has been under scatting critique in print and electronic media for its failure to achieve the goals of broadening the narrow tax base and enhance revenue collection. The revenue collection in the outgoing fiscal year is well over Rs.400 billion mainly because of the poor performance of Inland Revenue Services Department. Even the Prime Minister was the target of criticism for not giving a workable tax vision when he distributed awards among the honest taxpayers few months ago. Let us hope the new system of online tax profiling will prove instrumental in achieving the objectives of bringing tax evaders under the tax net and substantially increasing the tax collection through progressive system of direct taxation. The saying goes: “If there is a will there, there is a way.”