Vol. 5 Num 54 Tue. July 20, 2004  

Only 20 percent tax collected
NBR must improve record
Without tax revenue, neither can a government be run, nor will it be able to provide basic services to the citizens. Taxation, therefore, is the cornerstone of governance. It is thus that we share the dissatisfaction expressed by the finance minister over the underperformance of the National Board of Revenue (NBR) when it comes to the matter of collecting taxes. It is imperative that tax collection be made as efficient and evenhanded as possible.

The available statistics are very discouraging. It seems that only 20 per cent of the collectible income tax revenue is netted by the NBR. This is a lamentable figure, and every step should be taken to ensure that the targeted revenue figures are reached. We cannot say what the exact reason for this shortfall is, but whether it be inefficiency in collection, collusion between tax officials and tax defaulters, errors in assessment, or a lack of confidence in the system, no effort should be spared in order to rectify the matter.

Of the more than 1.5 million who have been brought within the tax net and possess Tax Identification Numbers, barely half a million are actual tax-payers, and many of them pay taxes significantly lower than assessed. Those already within the purview of the NBR must be made to pay their fair share -- and it seems to us that following up aggressively here would be an obvious and simple place for the NBR to start.

The next step must be to expand the tax net and bring a greater proportion of the population under the purview of the NBR. Out of a population of over 140 million, it is absurd that there are still only slightly over 1.5 million TINs. Almost 30 per cent of domestic GDP remains totally outside of the purview of the NBR, and many professionals and small businessmen continue to avoid payment.

But the problem is not merely with the underperformance of the NBR nor corruption on the part of its officials. It has also to do with harassing genuine and regular taxpayers, not to forget though, the lack of conscience of those who avoid paying taxes. It is a crying shame that so many of our fellow countrymen and women have no moral qualms about not paying their fair share.