September 15, 2006	Friday	Sha'aban 21, 1427

KARACHI, Sept 14: The Medium Taxpayer Unit has geared up to collect tax returns from 277,000 registered taxpayers belonging to salaried class and small businesses to meet a revenue target of Rs27.90 billion fixed by the CBR for the tax year 2006.

The last date for receiving tax returns is September 30.

Officials told Dawn that during the first two months, the MTU had collected Rs3.139 billion, which is 25 per cent higher than the corresponding period last year. The national growth in revenue collection during this period stood at 17 per cent over the same period last year.

In order to broaden the tax base, the MTU has set up 10 temporary tax facilitation centres (TFCs) in its jurisdiction stretching from Keamari to National Highway and divided by Shahra-e-Faisal. These centres have started functioning from Sept 1 at various markets like Park Tower, The Forum, Glass Tower, FTC, Awami Markaz, etc.

These TFCs will facilitate and educate taxpayers and also provide assistance in preparing and filing statements and returns of income tax for the tax year 2006. These centres are equipped with `master index’ and could issue national tax number (NTN) and also challans against revenue receipts.

Asrar Raouf, commissioner income tax, MTU, told Dawn that by adopting such measures the CBR planned to improve tax-to–GDP ratio. “For the first time we are approaching the taxpayers to create awareness and tax culture at shopping malls where a large number of shopkeepers do not file tax returns.”

Mr Raouf said out of total registered taxpayers with the MTU, 48,000 were non-salaried and the remaining was salaried class belonging to the Karachi region. Against a target of Rs20 billion, last year the MTU collected Rs23 billion. He said initial response from the TFCs was positive and on public demand their working time had been enhanced. These centres were working from 11am to 5pm, but now they would also remain open from 5pm to 10pm, he added.

During this year, he said the MTU increased the number of taxpayer by 61,000 and hoped that the TFCs would further help enhance the number, as many market places were being covered by these centres and service was being provided at their doorsteps in order to create awareness and compliance.

In the past there were zones and circles to share the working and define areas, but now the MTU is working on functional base where each section has its own function like audit, assessment, etc.

However, business leaders feel that the strength of manpower in all the new setups created under the CBR’s reforms agenda is much below the requirement and this is retarding the working and efficiency of the MTU as well as the Large Taxpayers Unit. Citing an example, the business circles say if there are 277,000 taxpayers registered with the MTU this means that the present number of officers standing at 23 will share this burden, which comes to around 25,000 cases per office.

They said it was humanly impossible to even sign this number of cases by an individual what to talk about assessing or auditing of such a large number of cases.

But revenue collectors strongly feel that with the change in the CBR setup and its policy base of voluntary compliance there need a change in taxpayers’ mindset but that could not be seen so far.

It is believed that higher revenue collection and target up to Rs845 billion for the current fiscal is only being achieved due to higher economic growth, otherwise the tax-to-GDP ratio is still much below the ratio recorded in the countries of the region.

The MTU will ultimately be merged with Regional Tax Office, which will start functioning from July 1, 2007. “All domestic taxes like income tax, sales tax and federal excise duty of the non-corporate sector will be brought under one roof,” Mr Raouf added.