ISLAMABAD: The Federal Board of Revenue (FBR) has failed in broadening the tax base significantly as only a few thousand new taxpayers have filed their returns on a voluntary basis.

Official figures available with Dawn show that around 233,000 notices were issued by the FBR to potential taxpayers till Dec 23, 2015, but only 33,000 of them filed their tax returns so far.Finance Minister Ishaq Dar in the first budget of the PML-N government in 2013 had announced that 100,000 new taxpayers would be added to broaden the narrow tax base.

The target of issuing notices to 300,000 potential people will be achieved by end June 2016, a tax official said. “However, it seems impossible all of them file their tax returns. The revenue generated through the drive so far is just a few billion rupees.”

Also read: FBR assures early payment of refund claims

The government had also announced an incentive package for those who were on the tax rolls but have not filed returns for the last five years.

Initially, a tax demand was created for an amount of Rs16 billion. However, the amount was later lowered to Rs4.5bn after readjustments.

The outcome of both the schemes is negligible and unnoticeable. This weak compliance reflects poorly on the tax enhancement drive.

The government had also held out an assurance to the IMF that 300,000 new taxpayers will be added by June 30, 2016.

Tax analysts say one should not blame people as no one pays tax happily the world over. It is the job of an effective tax department which makes it happen.

Data show that meagre amount of Rs1.2bn collected from the new taxpayers, which is still far from satisfactory.

A tax official told Dawn that the FBR confiscated 230 vehicles from defaulter taxpayers and also attached 140 properties of people failing to deposit their taxes within the due dates.

“Until the tax liabilities are cleared, these attached properties and cars cannot be sold out,” added the tax official.

The National Database and Registration Authority (NADRA) has shared data of over three million potential taxpayers with the FBR, who have luxury houses in posh areas and multiple bank accounts and frequently visit foreign countries, but do not pay any tax.

The tax official said that more than 80 per cent of the notices could now easily deliver to the recipients before verification from the NADRA. Earlier, the non-delivery rate was very high because of incomplete or incorrect addresses and people’s migration and refusal to receive the notices.

Tax officials believe that no effective outcome of the move was possible until there was a fear of enforcement and audit among people. Currently, both are missing in the tax machinery.

A comparison shows that only 0.4pc of population pay taxes in Pakistan, against 4.7pc in India, 58pcin France and 80pc in Canada.

Published in Dawn, December 25th, 2015