May 14, 2006	Sunday	Rabi-us-Sani 15, 1427

KARACHI, May 13: With the introduction of the Universal Self Assessment Scheme (USAS), the number of income tax defaulters has significantly reduced. Of the total 87,000 registered taxpayers in Karachi, only 3,000 were declared as ‘defaulters’ during the tax year 2005.

Sources in the income tax department told Dawn that many of the defaulters were importers and exporters who had paid tax at source but had not filed tax returns required under the law by September 30, 2005 deadline.

The sources pointed out that the USAS had not only prompted voluntary compliance among the taxpayers but had also curtailed the number of defaulters.

Under the scheme all tax returns filed are accepted and no question is asked about the income shown in the tax forms. The scheme is an important tool, for promoting voluntary compliance rather collecting tax under coercion, of the reform agenda of the Central Board of Revenue (CBR).

The sources said that notices had been issued to the defaulters to file tax returns even if they did not have any taxable income during the tax year 2005.

The relevant section of the Income Tax Ordinance-2001 stipulates that every person, who has been charged to tax in respect of any of the two preceding tax years, is liable to file return of income at least for four years.

The objective, the sources maintained, was not to generate revenue but to widen the tax net which was the top priority of the government. They said that the names of the taxpayers, who did not file tax returns this year, had been obtained from the data compiled by Pakistan Revenue Automation Ltd. (Pral).

The department was pursuing the taxpayers to file returns even if they did not have any taxable income. Those filing tax returns now would still be provided the facility of USAS and no question would be asked about their income and expenditures.