Luxury cars data to be used: FBR picks over 5,000 unregistered rich people

The Federal Board of Revenue has initially picked over 5000 unregistered persons belonging to elite class, who have purchased expensive vehicles (price of Rs 1 million and above of each vehicle) liable to obtain National Tax Numbers (NTNs) and file income tax returns.
Sources told Business Recorder here on Thursday that the Director General Broadening of Tax Base Shahid Hussain Asad would use luxury vehicles data for bringing these rich people into the tax net on top priority basis. On the basis of motor vehicle registration data collected so far; the FBR has initially identified 5,252 records in respect of the vehicles whose owners are not in the 'NTN Master Index' and the vehicles fall under following categories: Firstly, the engine capacity of such vehicle is 1000CC and above. Secondly, the year of manufacturing is 2006 onwards. Thirdly price as per vehicle registration data is Rs 1 million and above.
In respect of each vehicle the data contains the CNIC, name, present and permanent address of the vehicle owner. It also includes the registration number, price of vehicle, engine capacity, make and year of manufacturing, FBR said. According to sources, this information would be helpful in broadening of tax base.
The Directorate General of Broadening of Tax Base would also utilising similar kind of third party information of elite class who has neither obtained the NTNs nor filed their income tax returns. When contacted, sources said that the FBR with the help of internal database, the FBR has collected data of expensive cars, which would be used for broadening the tax base. During the past five years, if a person has owned vehicle having price of Rs 1 million and above, his estimated average annual income should be approximately Rs 2 million.
On monthly basis he is earning Rs 1.5 to 2 lakh in case the value of the car is one million rupees and above. If these 5000 taxpayers have been brought into the tax net, these persons are likely to fall into the higher tax slab of 15-20 percent. If these persons are successfully registered under the tax net, the minimum revenue of Rs 400,000 per taxpayer would be collected in the national exchequer.
The calculations ultimately show that an amount of nearly Rs 2 billion as tax is collectable from these 5000 persons. By giving all the margins of sources of non-taxable income of these taxpayers, 50 percent of Rs 2 billion must be collected by the tax department. These rough estimates merely show that un-registered owners of expensive vehicles are earning huge income, but paying nothing in the national kitty.
If huge amount of revenue could be generated from owners of only 5000 luxury vehicle, the volume of revenue could be imagined from thousands of such cases operating in the undocumented regime, sources added. The Directorate General of Broadening of Tax Base is working as a key department of the FBR for documentation of the economy.