TUESDAY MAY 10: Compulsory NTN for new gas connection: RAC opposes FBR budget proposal

ISLAMABAD: The Revenue Advisory Council (RAC) has opposed a budget proposal of the Federal Board of Revenue (FBR) to make the National Tax Number (NTN) mandatory for new commercial and industrial applicants of gas connection for documentation of the economy.
Sources told Business Recorder here on Monday that some FBR Members had proposed compulsory provision in the Income Tax Ordinance 2001 to allocate NTNs to all the consumers with commercial and industrial gas connections. Some members of the RAC informed the tax authorities that the FBR has computerised national identity card numbers (CNICs) of the new commercial and industrial gas consumers. The FBR can obtain the latest data from the gas companies of major industrial and commercial consumers and the exercise should be carried out in the field formations.
The FBR can check the data and verify it any time whether the NTNs have been issued against CNICs of commercial consumers. However, the RAC has not agreed with the proposal of the FBR to make it compulsory for the commercial and industrial consumers of gas to obtain the NTNs when applying for it. It would unnecessarily force each and every unit to obtain NTN at the time of obtaining gas connections. Contrary to this, the FBR can scrutinise records of the gas companies for issuance of NTNs to all those units which are operative and engaged in the manufacturing processes, etc.
The rationale behind the FBR budget proposal was to ensure documentation of all commercial and industrial consumers of electricity engaged in business activity. It is important to mention that around 1.01 million NTN holders, 50 percent corporate sector, 31,272 sales tax registered persons and 23,000 withholding agents are not filing their returns and not paying due tax.
The data further showed that nearly 1.0188 million national tax number holders are not filing income tax returns. Total NTN holders as of June 30, 2010 were 2.984 million on national level and about Rs 1.965 million income tax returns have been received by December 31, 2010. Total number of sales tax registered persons across the country stood at 131181 and sales tax return filers are only 99,909 and around 31272, or 24percent, sales tax registered persons are not filing their sales tax returns.