LAHORE, May 7: The government is losing a tax revenue of Rs100 billion annually due to incorrect procedures, policies, mismanagement and inefficiency of the tax collecting agencies, says the All-Pakistan Tax Bar Association.

In its budget proposals for the fiscal 2003-04 submitted to the federal finance ministry, the APTBA said the government collected only 2.5 per cent of the total tax revenue through the efforts of the Central Board of Revenue, while the rest was deposited by taxpayers in the form of withholding tax. It said the policies pursued by the CBR were damaging the economy of the country.

The association said at least 1.5 million potential taxpayers were not being brought into the tax net by the CBR due to its inefficiency. It said almost every assessment completed was contested in appeal. In 90 per cent appeals against the tax department, the decision was given against the tax collecting agencies.

The Bar said the government should take it into confidence to remove the flaws and anomalies in the tax system. It also proposed that the discretionary powers of the tax collectors be withdrawn forthwith. They should not have the powers to issue show-cause notices because most of them were illogical, illegal and motivated.

It alleged that most tax officials were involved in illegal practice, and they should be told to wind their practice. They should also be disallowed to visit the premises of the taxpayers.

The Bar termed the establishment of the Large Taxpayer Units and the Medium and Small Taxpayer Units wastage of public money.

Further, the proposals called for amalgamation of the sales tax and central excise departments into the income tax department.