KARACHI, July 23: The Regional Tax Office (RTO), Karachi, has chalked out a plan to bring more people in the tax net as it believes that there are 1.597 million potential taxpayers in the city against the present 0.5 million registered taxpayers.

Presently, country’s tax-to-GDP ratio stands at 9 per cent, which is lowest in the region. A two-pronged strategy is being adopted by the RTO to increase taxpayers’ population. In the first place stress would be laid to broaden the tax net and in the second phase efforts would be made to consolidate the existing tax-base by checking evasions and mis-declarations.

These measures are being taken to achieve the Federal Board of Revenue’s target of improving the tax-to-GDP ratio to 15 per cent by 2015. Consequently, the RTO Karachi, in order to bridge the gap between anticipated taxpayers and the existing lot of 0.5 million, has worked out the city’s population to be around 14.5 million.

According to the RTO study after deducting the non-taxable segments of the population the number of potential taxpayers would come to around 1.430 million but on adding around 0.157 million of working women the total taxpayers’ population could be 1.597 million in Karachi.

The RTO has based its study and projected figures on 1998 census and also took some support from international study groups such as Wikepedia Encyclopedia, Humanitarian Policy Group of UK, report by UN-Habitat.

Despite the fact that the FBR had been meeting its revenue targets for the last couple of years and also surpassed the target of last fiscal by collecting over Rs850 billion but the country continues to have the lowest tax-to-GDP ratio in South Asia.

In order to identify a greater part of taxpayers’ population the RTO in coming years would concentrate on enforcement steps, internal control and development and utilisation of data to hunt potential taxpayers, which it believes to be over 1.597 million.

Under the enforcement plan the RTO would cross match the data obtained from the tax returns with the data bank created through the efforts of proposed internal control cell and would also identify non-filers of tax return and will initiate action accordingly.

About 45 days before the last date of filing of tax returns the RTO Karachi will set up kiosks at important commercial centres in all 18 towns of the city. The objective of these centres would be to educate the taxpayers, especially the big ones and the management of federal and provincial government offices.

Workshops will be arranged to highlight changes brought in the tax law.

In line with FBR’s policy and intended changes in law the taxpayers would be encouraged to use e-filing of returns and statements and a scheme of certified tax return preparers would also be launched.

The director general of RTO Asrar Raouf told Dawn that these suggestions were also came up for discussion during the recently held field officers conference in Islamabad.

He said most of these recommendations were welcomed by the FBR chairman and were going to be implemented starting from opening around 50 tax kiosks in major commercial centres from August 15.