One of the most significant economic challenges Pakistan has been facing since day one is broadening its tax base. The government of Pakistan Tehreek-e-Insaf (PTI) is well aware that it needs to get itself on reliable and firm financial footing. Thus, since the PTI government took charge of the state’s affairs, tax collection is amongst the issues that the government has been focusing on. Apart from offering incentives and taking other measures to broaden the tax base of the country, the government is trying to establish a link between the Federal Board of Revenue (FBR) and National Database and Registration Authority (NADRA).

If the ruling party succeeds in establishing the link, though there are differences between NADRA and FBR on data sharing, it can easily identify tax evaders. Theoretically speaking, the need for establishing a working link between FBR and NADRA will help the former to broaden the tax base and improve its ability to enhance the revenue collection. However, even if this connection is made, the differences between the two bodies over the mechanism of data analysis and authenticity, and how to use the dataset as a tool would render the whole exercise fruitless.

Therefore, the government has taken the right step by constituting a subgroup to share its report on the disagreements between NADRA and FBR. The subgroup’s instructions to present its findings to the chairman in a week shows that the government is serious in breaking the deadlock. The desire to establish the link informs us that the authorities are making special efforts to identify people who are not registered or paying taxes.

The state is keen on bringing the evaders into the tax net. For all practical purposes, a centralised database with all departments overlapping is the need of the hour. It will help eliminate any gaps or issues as well, beyond the more obvious benefit of increasing the tax base by adding more payers to FBR’s list.