ISLAMABAD, May 21: The government has decided to set up five Medium Taxpayers Units (MTUs) based on functional specialization and automation to be in operation from July 1, 2004.

Official sources told Dawn on Friday that these MTUs will be established at Karachi, Faisalabad, Rawalpindi, Quetta and Peshawar to replace the current circle based system of income tax as part of the re-structuring of the tax administration.

The decision to set up five new MTUs was taken following the successful operation of the MTU established at Lahore on October 31, 2003 for income tax with representative sample of 10,000 cases.

According to the officials, initially 1.50 million taxpayers will be registered at MTU Karachi. These taxpayers will include non-corporate business taxpayers and salary taxpayers.

Similarly, at MTU Faisalabad 80,000 taxpayers will be registered; 80,000 taxpayers at Rawalpindi MTU; 30,000 taxpayers at Quetta MTU and 55,000 taxpayers at Peshawar MTU.

The officials said that at Karachi MTU the number of taxpayers would be increased from the next financial year. However, the officials said that all the income taxpayers will be registered at the four other MTUs.

They said that Central Board of Revenue (CBR) has already started appointment of officials for these MTUs. According to the officials, CBR will appoint 446 tax officials on various positions in all these five MTUs.

The officials said that these MTUs were aimed at reducing the interaction between the taxpayers and the tax collectors thereby eliminating the undue harassment and misuse of discretion.

According to the officials, during the year the tax officials would work with the stakeholders for the development of the new tax system and its administration. They further said that an attempt would be made to maximize compliance with statutory filing of returns and dispose of rectification application.