How FBR can be improved?

[The Accountant]

the solution lies in simplification of tax laws.... this is the only way to make it easier for the tax collector to collect the right amount and also for senior officials to monitor the whole process... let me explain why

Imagine that you are a tax collector. You go to a shop and want to collect the tax they owe. You look at shop's income and tell them to pay an X amount. But the shopkeeper tells you that the correct amount is much lower. Why? Because the shop sells different products which have different tax rates. Perhaps the shopkeeper is lying and using this to understate the tax they owe. But it is almost impossible for you to calculate the exact amount. You either give up and agree to accept whatever the shopkeeper is willing to pay. Or, you bully the shopkeeper into paying whatever you are demanding. Or, you take your own cut from the shopkeeper as you know that no one can possibly come back and check if you collected the right amount.

You then go to a business. You make a similar demand. But the business tells you that they earn their income from multiple sources each of which has different tax rates. They show you some documents. Perhaps the business is lying. But it requires a lot of effort to verify if they are telling the truth or not. You again face three options: i) accept; ii) take bribe and let it be; and, iii) bully.

The whole system is marred by similar problems...

Can there be a bigger problem than this?

You summarised the whole scenario beautifully ...

In reality there are dozens of tax rates and FBR do not want to do the hard work and keep on bullying the existing tax payers for paying more tax irrespective of the fact that tax is due or not ...

 

[CrazyZ]

Taxes can be used as tool to shape public behavior. People that do things against society should be penalized by the tax system. The wealthiest criminals should be subject to asset seizure, even if that money is over sees (drug dealers, land mafias...I doubt they pay taxes). Wealthy individuals and business that invest in infrastructure, defense industries, save water, and export industries should be rewarded with lower tax rates.

Fundamentally the system has to be simple and enforceable. Because Pakistan is an all cash society of mostly self employed individuals, knowing peoples true income is almost impossible. A computer system that can ID the top 25% of individual and business earners by looking at assets/bank transactions/consumption are....is a must. These groups should be targeted to pay income tax.... An intelligence led taxation operation.

Going after the bottom 75% for income tax would require a lot of resources and not net a lot of money. These folks can pay consumption taxes like service taxes and permits for cars/tv's/etc.

 

[AZADPAKISTAN2009]

RUN TV / NEW PAPER CAMPAIGN
GOVERNMENT WILL START TAX COLLECTION RAIDS IN 30 DAYS , MAKE SURE YOU HAVE FILED YOUR TAXES !!! PEOPLE WILL KNOCK ON YOUR DOOR 100%

• File Online (Website)
• Come to FBR office
• Do your filing with Accountant Help , He does it for you

1,800,000 is still penuts in country of 200,000,000 Million people

Households alone in Pakistan are around 50,000,000 to 75,000,000 homes
Household = 1-4 people in one , with 1 person being the bread winner


Raid Teams be as follow

• 5 Ranger Officers
• 5 Police Officers
• 2 FBR officials

Personal Income Tax Evaders

• SHOW UP AT MASSIVE HOME , DEMAND OWNER TO BE THERE , ASK THEM LAST YEAR'S TAX RETURN

• Are you the Owner of This Massive Villa (Yes/ No)
• Who is Owner of Villa (Yes I am , No I am not)
• Did your File Taxes (Yes / No)
• Do you have copy (Yes / No)
• Where do you work ?
• Does you have Bank Account ? (Yes / No)
• Do you have document for Property Value ?
• Do you pay Property Tax ?
• What is your Monthly Tax Payment ?

No Taxes Filed : Fine issued 50,000 Rupees payable in next 30 days

Payable : FBR Account of Pakistan, You keep copy from Bank if asked

Other outcome : You paid!!!!! Ok fine , if we find anything missing we will call you

• Register yourself in next 30 days on online system (WARNING ISSUED)

Business Income Tax Evaders

• SHOW UP AT BUSINESS CENTER , DEMAND OWNER TO BE THERE , ASK THEM LAST YEAR'S TAX RETURN

• Are you the Owner of Business (Yes/ No)
• Who is Owner of Business (Yes I am , No I am not)
• Did your Business File Taxes (Yes / No)
• Do you have copy (Yes / No)
• What is your Monthly Revenue (Have Copy of transaction / No Don't have it)
• Does your Business have Bank Account ? (Yes / No)

No Taxes Filed : Fine issued 1,00,000 Rupees payable in next 30 days
Payable : FBR Account of Pakistan You keep copy from Bank if asked

Other outcome : You paid!!!!! Ok fine , if we find anything missing we will call you

Register yourself in next 30 days on online system (WARNING ISSUED)


Going after tax evaders will have to done done like National Consensus Door-To- Door operation



Launch Door to Door Military Ops + FBR and in 3 month , we will have 10 million new registrants in system

FBR + Rangers need to go door to door to raise awareness now

Let people know in 3 months Raids will start so they have 3 months to file taxes
on free website or go thru accountant or face the Raid Door to Door

And get Fines !!! If they can't produce Documents


The only way to get Maximum people registered is by a Door to Door , campaign run by Ranger force + FBR. Similar to a national consensus

• Once public will start to get 50,000 Rupee Challan or 1 Lakh rupee Challan they will come to their senses
• After Challan is issued give them 30 days to file on website or thru accountant

FBR officers would issue fines on the spot payable with in 30 days if the owner of home or business can't produce their Tax Filing Record copy or if they don't check out to have paid on website



Just knock on Door Pass out Tax Challan if Taxes not filed

Easy to see how a planned Ranger + FBR , joint operation door to door Chalans for None filers can easily be done

1 Karachi 14,916,456
2 Lahore 11,126,285
3 Faisalabad 3,204,726
4 Rawalpindi 2,098,231
5 Gujranwala 2,027,001
6 Peshawar 1,970,042
7 Multan 1,871,843
8 Hyderabad 1,734,309
9 Islamabad 1,009,832
10 Quetta 1,001,205
11 Bahawalpur 762,111
12 Sargodha 659,862
13 Sialkot 655,852
14 Sukkur 499,900
15 Larkana 490,508
16 Sheikhupura 473,129
17 Rahim Yar Khan 420,419
18 Jhang 414,131
19 Dera Ghazi Khan 399,064
20 Gujrat 390,533
21 Sahiwal 389,605
22 Wah Cantonment 380,103
23 Mardan 358,604
24 Kasur 358,409
25 Okara 357,935
26 Mingora 331,091
27 Nawabshah 279,688
28 Chiniot 278,747
29 Kotri 259,358
30 Kāmoke 249,767
31 Hafizabad 245,784
32 Sadiqabad 239,677
33 Mirpur Khas 233,916
34 Burewala 231,797
35 Kohat 228,779
36 Khanewal 227,059
37 Dera Ismail Khan 217,457
38 Turbat 213,557
39 Muzaffargarh 209,604
40 Abbotabad 208,491
41 Mandi Bahauddin 198,609
42 Shikarpur 195,437
43 Jacobabad 191,076
44 Jhelum 190,425
45 Khanpur 184,793
46 Khairpur 183,181
47 Khuzdar 182,927
48 Pakpattan 176,693
49 Hub 175,376
50 Daska 175,170
51 Gojra 174,860
52 Dadu 171,191
53 Muridke 166,652
54 Bahawalnagar 161,033
55 Samundri 156,991
56 Tando Allahyar 156,562
57 Tando Adam 152,617
58 Jaranwala 150,380
59 Chishtian 149,939
60 Attock 146,396
61 Vehari 145,464
62 Kot Abdul Malik 143,434
63 Ferozwala 141,405
64 Chakwal 138,146
65 Gujranwala Cantonment 137,302
66 Kamalia 135,641
67 Umerkot 134,052
68 Ahmedpur East 133,369
69 Kot Addu 129,703
70 Wazirabad 128,060
71 Mansehra 127,623
72 Layyah 126,361
73 Swabi 123,412
74 Chaman 123,191
75 Taxila 121,952
76 Nowshera 120,131
77 Khushab 119,384
78 Shahdadkot 118,915
79 Mianwali 118,883
80 Kabal 118,103
81 Lodhran 117,851
82 Hasilpur 115,536
83 Charsadda 114,565
84 Bhakkar 113,018
85 Badin 112,420
86 Arif Wala 111,403
87 Ghotki 111,321
88 Sambrial 109,479
89 Jatoi 109,424
90 Haroonabad 107,858
91 Daharki 103,557
92 Narowal 103,067
93 Tando Muhammad Khan 101,863
94 Kamber Ali Khan 101,474
95 Mirpur Mathelo 100,760
96 Kandhkot 100,698
97 Bhalwal 100,135