KARACHI, June 8: The Corporate and Southern Regions of Income Tax, Karachi, have netted over 100,000 new taxpayers, surpassing the target of 98,610, officials said on Tuesday.

Finance Minister Shaukat Aziz has declared the tax year 2003-04 as "the year of broadening tax base". In order to achieve this goal, the CBR has directed all the tax regions of the country to broaden the tax base by fixing targets accordingly.

The ratio of tax revenue to GDP in Pakistan is very low as compared to other developing countries in the region. This ratio stands at 15 per cent as compared to about 25 per cent in India.

This year, however, the number of taxpayers has increased to 1.5. million from about 1.2 million a couple of years ago. The increase in income tax yield was estimated to be about 45 per cent during the last two years.

Taking a cue the policy-makers have decided to continue with the policy of documentation. Consequently, broadening of tax base through internal survey followed with an assessment of first year by the senior tax officers is expected to result in sustainable growth in the number of taxpayers as well as revenue potential.

The CBR has fixed a target for netting 300,000 new taxpayers for all the tax regions, but around one third of this target has been assigned to the Corporate and Southern Regions, Karachi. The officials say up to June 7, the target of 98,610 was surpassed by over 100,000 more taxpayers in the national tax net, which presently stands at nearly 1.5 million.

The task of broadening tax base in the Corporate and Southern Regions, Karachi, was assigned by the CBR to Income Tax Commissioner, Companies Zone-II, Irfan Nadeem. The staff and officers of the zone have managed to expand the tax net by adopting such methods which did not require direct contact with the taxpayers.

Keeping their operations within the framework of tax law, the team used section 114 of the Income Tax Ordinance 2001. Under the section, around six categories of persons are bound to file their tax returns: those whose income exceeds exemption limit; those who own immovable property (including flat); those who own a motor vehicle; subscriber of PTCL or mobile phone; foreign traveller (except Haj, Umra and Ziarat); and member of club.

The zone-II team first specified sources for collection of data of prospective taxpayers and then identified persons to whom notices were to be issued. After collecting the data from sources like PTCL, DHA, cell phone companies, clubs, etc., notices were issued. Consequently, in a short period of eight months the team managed to net over 100,000 new taxpayers.

The finance minister has been stressing that the aim of the ongoing tax reforms will ultimately result in fewer taxes, namely, income tax, sales tax and customs duty. All other taxes will be withdrawn.