Transaction-based assessment of errant taxpayers worked out

ISLAMABAD (October 13 2003): Tax consultant Maxwell Stamps has suggested the Central Board of Revenue (CBR) to thoroughly examine the financial transactions of the taxpayers to determine the income and assets of delinquent taxpayers.

They have also recommended that foolproof investigation should be conducted to locate the taxpayers, who are no longer available at their previous addresses with the department.

The proposal is a part of CBR Tax Reform Implementation Plan devised by the foreign consultants to improve tax collection through enforcement of measures.

Sources said that a large number of taxpayers were registered under the tax survey drive.

Later, these persons were not available on their addresses. Maxwell's proposal also focuses on this particular area to trace these ghost taxpayers.

The consultant was of the view that when other collection attempts are unsuccessful, salaries and bank accounts should be seized to pay delinquent taxes.

In this connection, personal or real estate/property of the persons could also be seized.

The CBR is examining the proposal in consultation with the Maxwell Stamps to work out its viability taking into account prevailing tax culture.

The plan has suggested that lists of taxpayers whose tax payments are delinquent will be received and taxpayers will be contacted to demand and secure payment.

Investigation of taxpayer financial matters will be conducted to locate and determine the value of income and assets of delinquent taxpayers for the purpose of enforcing collection.

The CBR should also assess administrative penalties against taxpayers as given in the tax administration laws.

Following managerial review, all closed cases along with case history, will be sent to the archive along with the taxpayer's other record for the tax year.

Referrals will be made to appropriate taxpayer audit and criminal investigations officials whenever substantial tax underreporting or criminal conduct appears evident based on enforced collection contacts.

Rationale for referrals will be fully provided in a transmittal memorandum sent through the enforced collection manager, the consultant maintained.

The CBR should compile reports on weekly basis reporting all cases received, closed and inventoried, together with other important information.

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