“The ID card will have a unique code number of the taxpayer and will be something like Visa or MasterCard. We are pushing for issuance by October,” Krishna Hari Baskota, revenue secretary, Ministry of Finance, told myrepublica.com.
MoF has expedited the process to issue the card after the government, through the budget for the 2009/10 fiscal, made registration at PAN mandatory for all income earners, irrespective of whether or not they pay tax. The government is optimistic that the program will widen the tax base. “In fact, we expect the program to bring in additional 200,000 taxpayers under PAN net by the end of this fiscal year,” said Baskota.
To execute the PAN enforcement plan, MoF has already formed a task force -- led by Deputy Director General of Inland Revenue Department (IRD) -- to formulate the directives and guidelines for the purpose. It has also been asked to finalize the standard format of electronic PAN identification (ID) card within a month.
The IRD is scheduled to discuss the directives with different professional organizations and disseminate wider information on PAN registration in August. “By September, it will have the ID card ready, and we will start distributing it from October,” said a senior IRD official.
The introduction of PAN card will initiate a new revenue regime wherein all the taxpayers of the country will be known by their PAN ID numbers and not their names. The employing firms and individuals will need to mention ID codes of their internal staffs as well as external consultants in receipts while paying remuneration or transferring earnings in their bank accounts.
When Inland revenue offices, which will have electronic records of all the PAN ID numbers and number holders, enter income details of firms in the spreadsheet, the system will record all multiple incomes and transactions of each PAN ID cardholder in a single window.
“Thus, it will help us to monitor income, assess tax liability and control revenue leakage from professionals and other service providers engaged in multiple firms,” said the IRD source.
The new system will also enable taxpayers to get tax clearance report instantly.
Revenue officials further stated that the IRD will launch PAN registration campaign in August, during which the department will interact with all income earning groups and make them aware about the PAN registration and tax amnesty scheme that the government has announced for new registrants.
Under the scheme, the government has announced that it will exempt income earners from all past income tax liability if they registered at PAN by mid-February, 2010.
milan@myrepublica.com
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