- Billions of rupees taxed money remains unclaimed
Despite claims of tightening the noose around non-filers in the next budget, the government has provided no mechanism or policy to make millions of cell phone and internet users as filers even though they pay billions of rupees in advance taxes.
to analysts, despite the punitive measures taken by the government, the number of filers, as per the economic survey 2016-17, is only 1.158 million. On the other hand over 80% from among 140 million cell phones and 42.5 million Internet users cannot become filers but still, they have to pay 14pc (as the fiscal year 2016-17) and 12.5pc (the fiscal year 2017-18) as advance tax on their bills.
Technically filers can get this advance tax back but non-filers cannot, hence billions of rupees remain unclaimed on account of advance tax on the use of phones and Internet by non-filers who are not even eligible to file returns and are common people.
A research paper presented in post budget seminar here on Monday says the filer and non-filer discourse during a couple of years has been used to identify taxpayers and tax evaders in broader terms.
A total of 140 million mobile phone users during the current fiscal year have been paying 14% advance tax on their bills in addition to regular tax (15%). In a sense on each Rs 100 bill, they pay Rs 29 as a tax. Similarly, 42.5 million people on each Rs 100 for their Internet bill, pay Rs 29 as a tax (14% advance tax and 15% regular tax). It is to be noted that 14% advance tax both on the use of mobile phone and Internet is supposed to be returned to the consumers upon filing income tax returns.
“Now by all practical means, only 1.158 million people have the opportunity to get their 14% advance tax on Internet and mobile phone bills back through filing of income tax return whereas 138.84 million non-filer mobile phone users and 41.34 million non-filer Internet users do not claim their 14pc advance tax- If we calculate this unclaimed money that goes to the government kitty unfairly into billions of rupees.
Out of 138.84 million non-filer cell phone users, according to an estimate, hardly 8.84 million people would fall under the category of to be potential filers as defines the section 114 of Income Tax Ordinance (ITO).
This means a net of 130 million people would still remain non-filers as they are the low-paid people from working class, who use cell phones for connectivity and do not own any moveable or immovable properties or taxable income. Similarly, out of 41.34 million non-filer Internet users, some 10.34 million may fall into the category of to be the potential filers, hence 30 million Internet users may not be eligible to come under the ambit of section 114 of ITO and to be pushed as filers.” it said.
The analysts opine that government should revisit its filers and non-filers discourse as the bulk of non-filers fall in the category of common citizens who have been burdened with unclaimed advance tax.
The finance minister must realise that in the garb of non-filers they are over taxing more than 50% of the common Pakistani citizens, who are not eligible as tax return filers. No doubt, tax base needs to be broadened for a stronger economy, but not at the cost of millions of poor people who are not eligible as filers but are being punished in the name of being non-filers.
