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October 13, 2019

Outdated utility consumers data most likely to lead taxmen astray


October 13, 2019

LAHORE: Barring National Database and Registration Authority (NADRA), most of the data available with utilities is erroneous as there is no way you can clearly establish the actual ownership of a property and imagine the result if taxmen were given this data to net the evaders.

We are frequently told tax evaders would be apprehended through utility and telephone bills. The problem in this regard is the electricity or gas might not be consumed by the person in whose name the connection is registered. These utilities are sitting on mines of flawed data because there is no transparent and easy law that automatically transfers the connection in the name of the current and actual user.

For instance if someone sells his house, the law requires that the property is registered in the name of new buyer in official records through a transparent procedure. However the new buyer inherits all the utility connections (water, power and gas) that remain in the name of original buyer.

These connections usually remain in the name of the first owner even after the property had been sold over and over again to different buyers -even after the original owner’s death. New owner may get these connections transferred in his/her name but most avoid it because of the hassle they have to go through in this regard. So as far as the utility connections and landline connections are concerned there is no surety that the original subscriber is using them.

This misguides revenue officials. After obtaining the data from the utility company and finding that the yearly utility bill of electricity for instance is around Rs750,000/year (Rs62,500 per month) the official would go through the record to see if the individual pays any income tax or not. If the listed subscriber is not a taxpayer the department would issue a notice in the name of subscriber that may not even be alive. It is also possible that the current resident of that house from where this utility bill is generated is a taxpayer or tax evaders. In both cases the tax officials would have to go through another process of investigation. The revenue department lacks the capacity to conduct these investigations. They can take advantage of technology by sending notices to all subscribers paying heavy amount to the utility providers and not paying taxes at all but if the subscriber is not genuine they lack the capability to further investigate all cases.

This is a major flaw in our utility companies and this ought to be streamlined. If a house is given on rent then the name of the new occupant must be registered with the utility company and recorded in its data base. In the same way if a house is sold to someone it should be incorporated in the registration process to change the name of subscribers at the utility end as well. The subscribers should be asked to name the person in whose name the utility connection can be transferred in case of his/her death. We are living in an age of technology. These changes would not consume much time but the record of the property would be straight. It will also save numerous frivolous litigations in which sometimes tenants claim to be the owners of the property. If their name in the utility company is not registered as an owner but a tenant, the fraud would be exposed.

Even otherwise it is necessary that the records pertaining to property, utility bills and landline connections are properly maintained. The NADRA database incorporates all entries made against any particular national identity card. If the details of current users of utilities are incorporated in its data base it will facilitate the tax officials to take appropriate action against tax evaders. It will also save wastage of time and money of tax officials that continue sending notices to consumers with high utility bills when in reality they are not the actual consumers.

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