ISLAMABAD: Although Finance Minister Ishaq Dar’s announcement of publishing a tax directory has been largely downplayed by the media, it is a giant step forward, a bold decision in radical departure from the past practices to keep this vital information under the veil of secrecy by misquoting laws.

Pakistan will be the fourth country in the world releasing an annual directory of all taxpayers, lawmakers included, after the Scandinavian countries: Sweden, Finland and Norway.This is the third major policy decision of Dar that he took in six months to reform the economy as he earlier abolished the secret funds with different ministries and rationalised the remuneration to government servants for attending board meetings.

Reacting to our latest report “Taxation by Misrepresentation,” that was second in the row in two years unmasking the malpractices of lawmakers who not only fail to file the tax returns, 12% of them are without NTNs, Dar said all of them will be issued NTNs latest by January 31 and their tax directory will be published on February 15 this year.

“When I meet officials from the western countries, they say your lawmakers even don’t have NTNs. They would not have known about this had there been no reports published by you,” Dar said while talking to The News.

“I told the FBR late Friday that we will have to release the directory,” he said. It coincides with a rejoinder published the same day in The News to chairman FBR to contest his claim in the Public Accounts Committee that tax information was confidential and could not have been publicised.

Dar said he held a meeting with the FBR officials on Monday to give them a formal go ahead on the tax directory. As being the chief financial representative of the federal government, he was authorised to issue this direction in line with Article 216 (5) of Income Tax Ordinance 2002.

Not only the tax details of all the lawmakers, 1,174, of Senate, national and provincial assemblies will be released on February 15, a directory of all taxpayers of Pakistan will be published within this fiscal year, hopefully by the end of April.

When our previous report “Representation without Taxation” was released that named 67% lawmakers in the Senate and National Assembly who did not file tax returns other than 20% members with NTNs, the then Federal Tax Ombudsman Dr Shoaib Suddle had also ordered the publication of tax directory of public office holders under Article 216 (6) of the Income Tax Ordinance.

“Not only will publications of a taxpayers’ directory have a salutary effect on tax compliance in the country, it will also assist in evolving a tax culture conducive to fairplay and democratic values,” he had ruled while rejecting an FBR plea that doing so would expose them to security risks.

The FBR, however, neither followed the FTO’s directives nor of the Lahore High Court that ordered it in April 2013 to upload on its website the list of all tax defaulters contesting the elections.

Our report found 47% lawmakers as tax defaulters, let alone the total number of candidates falling in this category as 23,900 election applications were received.

Dar said the directory will be published every year containing the tax details of all the taxpayers for three years, a practice that is set to improve the compliance of tax laws and enforce a strict tax regime in Pakistan where less than one percent population files returns.

Even this year, around 0.8 million individuals submitted tax returns and half of them did zero filing, a rampant culture of non-tax payment that increases the country’s reliance on foreign borrowings and aid for running the government and meeting the budgetary targets.

The directive about the tax directory is not the first radical decision of Dar. He surprised all and sundry when he announced the abolition of secret funds with an immediate effect that were doled out to different departments. He made this announcement on June 11 in his budget speech in the National Assembly and Accountant General of Pakistan Revenue was directed not to release any amount afterwards.

Dar then aimed at the top bureaucrats who were earning huge amounts of money running into millions in lieu of the fees paid to them for participation in the meetings of various Public Sector Enterprises (PSEs) and Corporate Entities.

In an order issued on November 20, 2013, the Finance Ministry barred government servants’ appointment in more than one board of directors of PSEs and corporate entities. It was also directed that such government servants would only be permitted to retain an amount of Rs600,000 per annum received by the officer on account of their participation.

Any amount received over and above this would have to be refunded and deposited in the national treasury. This order was also implemented with an immediate effect, causing sleepless nights to top bureaucrats who found it a lucrative source for parallel income.

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