Govt working on capacity-based taxation for traders.

ISLAMABAD -- The government is considering capacity-based taxation for traders across the country besides enforcing mandatory tax filing by maximum withholding taxpayers for increased tax collection.

Informed sources said the Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh has directed the Federal Board of Revenue (FBR) to engage with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and other chambers and trade bodies to cross-match data and cooperation.

The sources said the government had also engaged a leading tax Lawyer and Professor Dr Ikram ul Haq who has collected extensive data on potential taxpayers using electricity and telecom data on consumers and small, medium and large traders.

It has been noted that about four million electricity consumers were paying withholding taxes but were not paying tax returns. Similarly, there were about 13m cell phone users who were subject to withholding tax and a large number of them could be potential income taxpayers. There was, however, need to substantiate, collate and cross-match various data sets.

Dr Shaikh also met with Professor Haq to discuss proposals on improving the country's tax structure with help of effective data gathering and reconciliation mechanism.

The adviser appreciated Dr Haq's work on gathering data across the country from selected markets and from different commerce chambers. The professor also shared important...