By Abdul Wajid Khan ISLAMABAD, Feb. 03 (INP-Wealthpk) The government is implementing several measures to tighten the noose around the non-filers with a view to broadening the tax net. According to a written statement of the Ministry of Finance submitted to the National Assembly, for the purpose of broadening the tax base and encouraging the business community to get themselves registered with the sales tax department, legal measures have been introduced. Special powers have been granted to the Federal Board of Revenue (FBR) to direct the gas and electricity distribution companies for discontinuation of supplies to persons or entities required to integrate their outlets with the FBR or notified tier-1 retailers, who fail to integrate for the sales tax purposes. Also, it added, extra tax has been imposed on industrial and commercial gas and electricity connections of the persons or entities who either failed to obtain sales tax registration number or are not on the active taxpayer list (ATL) maintained by the FBR. For unregistered industrial consumers, the additional sales tax rate has been increased to 17% on monthly electricity bill, while for commercial consumers, the additional sales tax rate is 5% on up to Rs10,000 monthly electricity bill whereas 7% rate has been fixed on the billed amount between Rs10,001 and Rs20,000. Likewise, 10pc, 12pc and 15pc rates have been imposed for the bill amounts ranging from Rs20,001 to Rs30,000, Rs30,001 to Rs40,000, and Rs40,001 to Rs50,000, respectively. To bring non-filers into the tax net, the scope of the Sales Tax Act, 1990 has also been enhanced. Under this law, subject to certain conditions, every registered person is required to make taxable supplies to a registered person only, failing which the proportionate input disallowed if supplies made to an unregistered person, it highlighted. Moreover, regarding income tax collection, steps have been introduced in the Income Tax Ordinance, 2001 for further broadening of the tax base. These measures include maintenance of ATL and 100% enhanced rate of advance tax on certain transactions such as sale and purchase of property and purchase of vehicles, supply of goods/services in case of non-filers, sharing of information by NADRA for broadening of tax base and collection of additional advance tax from professionals not appearing on ATL and operating from residential premises having domestic electricity connection. Under these steps, the threshold of advance tax on electricity bill has been reduced from Rs75,000 to Rs25,000 but linked with return filer status to encourage return filing. Procedure for investigation and trial of offences under the Income Tax Ordinance, 2001 have been aligned with that of Sales Tax Act, 1990 in order to penalize concealment of income and to bring high net worth individuals into the tax net. Tax credit for Point of Sale (POS) integration has been introduced in order to bring more Tier-I retailers into the tax net. Advance tax on distributors, dealers, sub-dealers, wholesalers, and retailers has been extended to pharmaceuticals, poultry and animal feed, edible oil and ghee, battery, tyres, varnishes, chemicals, cosmetics and IT equipment to tap the supply of these sectors and bring them into the tax net. Special tax regime for small and medium enterprises (SMEs) sector has been introduced to bring small and medium manufacturers into the tax net. Digital intervention The FBR is also implementing several other measures, including Point of Sales (POS) and Track and Trace System (TTS), to promote automation and digitization of the processes involved in tax collection in order to minimize human intervention with taxpayers to ensure transparency and efficiency in the system. These measures are producing good results for FBR and its revenue collection shows significant growth as compared to the last year. According to Finance Ministry’s monthly economic outlook report, the FBR raised Rs2319.1 billion tax revenue with 36.8% growth during July-Oct of the current fiscal year compared to the same period of last fiscal year. Analysts believe digital intervention by the FBR will yield good results. It will help increase the country’s tax to gross domestic product (GDP) ratio and strengthen the tax system to build a foundation for sustainable economic growth.