The Federal Board of Revenue (FBR) has sought data of electricity consumers from power distribution companies on the directives of the federal tax ombudsman (FTO) to broaden the tax net.
In its report submitted to the FTO, the FBR stated that partial compliance had been made by certain companies while the remaining cases were being followed up
Furthermore, the FBR also said the matter had also been taken up with energy ministry for updating of consumers’ data through incorporation of CNICs.
The ministry has been requested to implement the FTO’s directions at the earliest.
Earlier, FTO Mushtaq Ahmed Sukhera took an ‘own motion’ on reports appearing in mainstream media identifying that there were around 350,000 industrial and commercial electricity and gas consumers in the country while only 50,000 were registered with the sales tax department
Around 300,000 commercial consumers were averting paying sales tax.
The FTO underscored that broadening of the tax base was a routine activity of the FBR field formations and the data available with DISCOs lacked essential information including consumers CNIC details and nature of business.
The FTO castigated the FBR authorities for not registering the 300,000 commercial consumers and urged it to consider utilising the data of advance tax collection to broaden the tax net and issue necessary instructions to the field formations.
It added that DISCOs were required to update and collect the database of consumers of commercial and industrial connections so as to enable the FBR for meaningful broadening of tax base.
The FTO also suggested to the FBR to obtain complete CNIC-based details of unregistered electricity consumers from DISCOs and cross match them with the FBR’s taxpayers master Index in order to generate lists of unmatched connection holders.
Furthermore, the data of the premises or business addresses of the industrial and commercial consumers maintained by DISCOs should be cross matched with the FBR master index to trace out unregistered persons and ‘benami businesses’.
The FTO also recommended to the FBR to take up the matter with energy ministry and other regulatory authorities concerned for updating the consumer database of DISCOs by incorporating the CNICs of actual users and nature of business.
The FTO also proposed to the FBR to regularly monitor broadening of tax base activities of the field formations to ensure that legitimate revenue is collected and deposited into government treasury.