The National Board of Revenue on Tuesday asked its income tax commissioners to identify potential sectors to encourage people for investing their undisclosed money.
‘Find out sectors beyond the existing ones that would encourage undisclosed money holders to invest that money,’ said a letter signed by NBR chairman Ghulam Hussain issued on the day.
At a meeting with the commissioners of the 31 income tax zones of the revenue board last week, Ghulam Hussain had stressed working to this end with a view to bringing more untaxed money to the formal economy and increase revenue collection.
The revenue board is desperately looking for new prospective sectors and pondering new strategies to achieve its revenue collection target for the 2012-2013 fiscal year as it had experienced a big deficit in revenue earning in the first half of the FY.
‘The fact that the amount of undisclosed money in the country’s economy is huge is widely believed by different local and international research organisations and the government officials as well,’ a top NBR official told New Age on Tuesday.
The government needs to bring more such money in the formal economy to boost investment as well as increase tax collection, he said.
The revenue board thinks the scope for investing undisclosed money should be widened as there are a lot of areas such as export procession zones, special economic zones where the country needs more investment, said board officials.
Despite widespread criticism from various sections of the country, the government has included a provision titled ‘Voluntary Disclosure of Income’ in the Income Tax Ordinance-1984 for legalising undisclosed money saying that it would bring investment.
According to article 19E of Income Tax Ordinance-1984, anyone may disclose his or her undisclosed money by paying 10 per cent penalty along with regular tax.
The other conditions are — the undisclosed money must be legally earned and it should be invested in the sectors specified by the NBR.
Currently, the legalised money under this article is allowed to be invested in any income generating activities.
The NBR has specified some sectors for investment of such money such as industrial activities, including its expansion, balancing, modernisation, renovation and extension of an existing industry, building or apartment or land, capital market and any trade, commercial or industrial venture engaged in production of goods or services.