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December 3, 2019

SSGC’s 2pc commercial consumers file tax returns


December 3, 2019

KARACHI: Less than two percent of commercial consumers of Sui Southern Gas Company Limited (SSGC) are registered with the tax authorities, indicating an adverse noncompliance culture in the country with a low number of return filers.

The sources said the Federal Board of Revenue (FBR) identified that less than two percent of commercial connection holders of SSGC are registered for income tax.

The sources said Large Taxpayers Unit (LTU) Karachi obtained details of connection holders from SSGC to identify individuals who are required to get registered with the tax authorities.

The SSGC had provided details of 20,589 commercial connections and out of which only 407 were found on the FBR’s database. And, that means only 1.97 percent commercial connection holders were compliant.

Commercial and industrial gas connection holders are required to be registered with the tax authorities under a section (181 of the Income Tax Ordinance 2001).

The gas utility is responsible under the statute to allow new connection to commercial and industrial consumers on the basis of their registration with the tax authorities.

The compliance rate among industrial consumers was found to be much better. The SSGC provided details of 3,862 industrial connection holders and out of which 3,193 consumers were found as filers of income tax returns. This means that around 83 percent of industrial consumers are compliant.

The SSGC also provided details of 2.2 million domestic consumers. The LTU Karachi obtained the details of noncompliant consumers of industrial and commercial connection holders. The unit asked the SSGC to provide details, including name, national tax number, computerised national identity card (CNIC), consumer number and address of the consumer.

The LTU Karachi shared the information with the respective Regional Tax Offices for enforcement within their jurisdictions. The sources said the LTUs have no jurisdictions over broadening the tax base as it is mandate of regional offices.

They said the SSGC consumers having industrial and commercial connections are also required to file monthly sales tax return. But, the current situation of compliance is very low. The sources said the FBR is focusing sales tax compliance after increase in number of income tax return filers, which exceeded 2.5 million for the tax year 2018.

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