January 20, 2007	Saturday	Zilhaj 29, 1427

ISLAMABAD, Jan 19: More than 0.479 million taxpayers have not filed tax returns with the income tax department during the tax year 2006 mainly due to the non-existence of an audit system, an official told Dawn on Friday.

The CBR has stopped audit of the taxpayers for the last three years following the introduction of the Universal Self Assessment Scheme (USAS). The growth in banking, oil, telecom and gas sectors is providing a shield to the non-reporting and non-compliant taxpayers during the last couple of years.

Official figures available with Dawn indicated that returns filed by non-individual taxpayers stood at 0.521 million up to October 16, 2006 up by 2.2 per cent as against 0.510 million returns received during the same period last year.

On the other hand, the returns received from non-individual salaried taxpayers declined by 2.6 per cent to 61,274 up to October 2006 from 62,896 over the corresponding period of the last year.

A senior income tax official requesting not to be named told this reporter the CBR had achieved the revenue target for the first quarter rather exceeding it only because of growth in the revenue coming from banking, petroleum and telecom sectors. This growth in no way can provide cover to inefficiency of the CBR to tap the non-corporate sector and even the corporate sector other than the four sectors, he added.

The CBR decision to empower the employers to file returns on behalf of the employees yielded tremendous results as the salary statements filed by the employers during the current fiscal year rose by 57.4 per cent to 779,073 as against 495,090 statements filed during the same period of the last year.

This means that without taking any pain CBR has received more than 50 per cent of the non-corporate returns, which helped the income tax officials in easily surpassing the total returns figures of the last year.

According to the official, the growth in the salary statements was meaningless so far as revenue was concerned as it only reflects the amount of tax deducted already and even if the statement was not filed the said amount of revenue would have automatically come into the lap of the CBR.

Analysts said the CBR had adopted the role of an idle spectator instead being an active player as tax collecting machinery. "In such state of affairs by saying that the plain has been put on auto, the pilot does not have a role except observing various indicators and so is the attitude of the CBR," they added. The analysts went on to say that without conducting any audit for the last three years of both income tax and sales tax the CBR has been claiming credit for the growth in the revenue.

The income tax official said that the CBR had held out an assurance to the World Bank before the commencement of the current reforms of tax administration to eliminate withholding tax regime, do away with presumptive taxation and broadening of tax-base for generating more revenue and finally launching USAS with a strong audit.

The official said none of these goals had been pursued as withholding tax has increased in numbers, presumptive taxation not only retained but its scope has been widened. The broadening of tax-base is not yielding any additional revenue rather it is refund-oriented and the USAS is being implemented without any audit.