CBR to soon launch 'Nexus' to broaden tax base

ISLAMABAD (March 08 2006): The Central Board of Revenue (CBR) is planning to collect information about investment made in shares, credit cards and bookings in five-star hotels to bring the potential taxpayers into the tax net, and some 100-150 leading sales tax, customs and income tax payers have been selected to test-run the new computer program 'Nexus' for broadening the tax base.

Sources told Business Recorder on Tuesday that the CBR would soon launch 'Nexus' to search for unregistered persons on the basis of data provided by government departments.

In this connection, tax profiles of 100-150 registered taxpayers would also be tallied with the data gathered through external sources.

The department is making arrangements to collect investment data on shares in all three bourses, credit cards, foreign travels and expenditure made by a person in hotels.

When contacted, sources in the stock exchange said that the National Database and Registration Authority (Nadra) and Central Depository Company (CDC) are working on a joint system to develop 'National Identity Number of Clients' in stock exchanges. Every client would be given a unique identity number, which would be used for maintaining database of the investors in stock exchanges. The CBR may try to access this system in future for obtaining details about the investment made in stock exchanges, sources added.

Other external sources included motor registration authority, tax return data, utility agencies, tax payment receipts, PTCL/mobile phone data and National Tax Numbers (NTN).

This would enable the system to follow the trail of transactions made by the taxpayers for verifying the authenticity of new program. The Nexus pilot project would ensure capability of the program in keeping complete record of transactions carried out by rich people. The CBR has named this exercise, as '360 degrees view of taxpayers' profiles'.

CBR sources said that CBR Chairman, its Members and Pakistan Revenue Automation Limited (PRAL) convened a meeting to implement the project. The 'Nexus' would check the transactions carried out by these selected taxpayers. Once the system's credibility is ensured with the available data, it would be launched countrywide for expanding the tax net. The idea behind the whole exercise is to conduct a thorough analysis of the tax profiles prior to launching of the system.

They said that the CBR in last meeting on 'Nexus' identified three new external sources for data collection. It encompassed stock exchanges, hotels and credit cards. Data of hotels mainly relates to the booking of halls in big hotels and expenditure made on such bookings. If a person spent an amount of Rs 0.5 million on a function, he would be questioned to give his source of income on the basis of declared income in the tax return.

Secondly, the purchases made through credit cards would be ascertained to compare the income with the expenditure. The source of income would be determined keeping in view the expenditure made through credit cards.

The CBR has also constituted a Task Force to ensure daily transfer of data of customs to the 'Nexus'. The cleansing of the existing NTN Master Index is also under way to update the 'Nexus' with the latest database, sources added.

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