The National Board of Revenue has requested the government agencies concerned to make mandatory the submission of proof of filing income tax returns for receiving a number of services, including registration and renewal of motor vehicles and trade licences, and participating in tenders.
The revenue board chairman Abu Hena Md Rahmatul Muneem on March 25 in separate letters to a number of ministries and divisions made the request to include the provision of providing tax acknowledgment slips in respective policies of the ministries and divisions.
It will boost the voluntary tax compliance as well as expanding the tax net, he said in letters to the agencies.
The decision came from a meeting held on March 15 with 10 ministries and divisions, including Power Division, Energy and Mineral Resources Division, Finance Division, Local Government Division, Road Transport and Highways Division, Bridges Division and industries ministry, on inclusion of the mandatory provision of submitting income tax returns acknowledgement receipts for certain services.
Muneem said that there was a provision of submitting taxpayers’ identification number certificates for participating in tenders, supply of goods, renewal of trade licences, motor vehicles, import and export registration certificates and enlistment of suppliers and contractors.
It was found that many individuals and businesses having TINs did not file income tax returns but received the services by showing TIN certificates which were generated automatically from the NBR system when an individual obtained the e-TIN, he said.
According to the NBR data, only 24.09 lakh TIN holders filed their income tax returns in the current fiscal year 2020-21 although the number of TIN holders was 50.72 as of June 30, 2020.
For example, the NBR chairman said, a private car owner could renew the registration for his or her motor vehicle just showing TIN certificate without filing income tax returns.
Currently, there is no provision of cancelling the e-TIN or barring the generation of e-TIN certificate in the Income Tax Ordinance-1984 for not filing income tax returns, he said.
The absence of such provision creates room for avoiding submission of income tax returns, tax evasion and concealment of income for unscrupulous TIN holders, he observed.
In this context, the ministries and divisions are requested to make submission of tax acknowledgment slips for the latest fiscal year for participation in tenders, enlistment as suppliers and contractors, registration and renewal of licences and others services, the NBR letter said. The move will also increase revenue collection from domestic sources, it said.
Officials said that they usually issued tax acknowledgement receipts to the taxpayers instantly after receiving income tax returns as per instructions of the NBR issued September 2020.
In the budget for FY21, the government has made submission of tax returns mandatory for all TIN holders, keeping few exceptions.
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