KARACHI: Tax authorities are in talks
with the provincial motor registration authorities to retrieve online data of
vehicles buying and selling in an attempt to net the untaxed money and increase
number of filers, officials said on Wednesday.
Officials said the FBR
planned a ‘massive’ drive against the black money involved in the purchase of
motor vehicles. “We are negotiating with the provincial authorities to access
data of registration and transfer of motor vehicles,” said an official.
An official at the
Regional Tax Office Karachi said the FBR is initially creating link with the
database of Sindh Excise and Taxation Department for accessing the motor
vehicles data on real-time basis.
Officials in the Sindh
Excise department also confirmed that the discussions with the FBR are
underway.
FBR chairman Muhammad
Irshad, at a meeting, said the revenue body is engaged in discussions with the
departments of all the four provinces to access the motor vehicle data.
Tax officials said the
purpose of obtaining data is to identify the sources of payments made by
individuals as well as increase the number of income tax return filers.
The officials said
huge undocumented money is involved in the transactions of motor vehicles’
purchases. Various estimates said the undocumented economy in Pakistan is
almost equal to the formal one.
Auto sales were
recorded at 122,347 units during the first half of the current fiscal year,
according to the Pakistan Automotive Manufacturers Association. Industry
experts said the total annual sales are expected to increase to 0.5 million in
the next five years.
FBR sources said the
data obtained from provincial revenue authorities would include registration of
both locally-manufactured automobiles and imported motor vehicles.
The FBR, through
broadening of tax base drive, collected data of 975,771 transactions of the
past three years from motor vehicle registration authorities of all the
provinces.
The sources said the
data provided by the registration authorities is not accurate, making it
difficult for tax departments to take action.
The official said the
real-time data sharing would lead to the collection of advance tax by the
provincial tax authorities.
The FBR, through
Finance Act 2015, introduced higher rate of withholding tax for non-filers of
income tax returns at the time of registration or transfer of motor vehicles.
Number of tax return filers is still on the lower side despite increase in car
sales.
The FBR amended the
tax laws in 2011 to make the return filing for persons with motor vehicles of
engine capacity of 1,000 CC and above mandatory.
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