Taming the traders

LAHORE: In the current age of information technology tackling corruption is not a big challenge; provided the state acts fairly and transparently and is not afraid of self-accountability.

We were one of the few countries that had biometric data of all its citizens. The computerised National Identity Cards (CNICs) now also have the feature of face reading, making it impossible for any individual to hide identity or obtain more than one CNIC.

The CNIC data is the strongest weapon available in the country that is recorded against the name of any individual buying or selling vehicles, real estate. The CNIC number is recorded when you check in a hotel, sign partnership deeds, on purchase air tickets for travel within or outside the country.

All citizens including politicians, armed forces personnel, members of judiciary, bureaucrats have to comply with the CNIC condition like ordinary citizens. Some buy properties in the name of their employees but even then the CNIC of the person must be provided.

The implementation of this condition is flawed. The seller would always dispose of his/her property or service by incorporating the CNIC number of the buyer. It is not certain what percentage of information is passed to the database of the National Data Registration Authority (NADRA), which maintains the data of each CNIC holder. Do the hotels and clubs pass on the registration data to authorities timely? Is the data thus passed incorporated in the relevant person’s name? Is this data passed on automatically to the Federal Board of Revenue (FBR)?

If the answer to all these questions is in affirmative then what is stopping the tax collectors from simply requesting each individual having huge recorded wealth to provide the source of income from where this wealth was acquired or the justify expenses incurred on foreign tours, hotel stay and school fees. The tax collectors it seems are selective in confronting the tax evaders.

A polite note for information regarding assets should be written to all individuals and action taken on the basis of their replies. As we all know that assets are being regularly acquired by both ordinary citizens and by influential segments of the society. Had the FBR ever asked a sitting minister, governor or chief minister about providing the source of income from where they accumulated assets? Surely most of them would justify their holdings but some may not. They should be treated according to the law.

Had the FBR ever dared to probe the assets of a judge (Qazi Fiaz Essa lone exception)? The FBR itself has drawn a line in this regard.

All judges or generals would willingly provide the information if asked. It is ironic that FBR by its own admission is sitting on a goldmine of data belonging to millions of CNIC holders but action has been taken selectively under political pressure.

While failing to benefit from this data the revenue collector is asking that CNIC number of beneficiary be mentioned on all transactions (purchase, sales or service) above Rs100,000. Three years on it has failed to impose this condition.

At the same time the FBR fails to act against buyers vehicles worth RS 1 to 8 million although the CNIC of vehicle buyers is available with it. Those not registered in tax net pay heavy withholding tax which satisfies the revenue collector.

In the same way the FBR has a record of all non-tax paying account holders in the banks. It is satisfied collecting the nominal withholding tax on transactions. In the process the withholding tax is also deducted from the accounts of registered taxpayers (the banks have their record). Most of them do not claim the refund in this regard. Those that do apply for refunds seldom get it.

There is another concession that has been granted to the traders that pay tax on the basis of annual turnover declared by them without any documentation.

The FBR cannot ask the shops selling smuggled goods about the source from which they acquired those goods. Most shopkeepers claim that the stocks have been acquired on credit from the sellers without naming them. In the 1980s there was at least a system under which the turnover of traders was calculated.

The wholesalers were expected to turn over stocks by 10 times per year and retailers by four times a year.

The FBR imposed tax on the basis of stocks verified by it from time to time. Now everything has been left to the traders that seem to be as influential as are the members of the ruling elite. There would be no confusion had the stocks been acquired against CNIC.