In the last article, Determining fair income-tax base, Daily Times, April 12, 2021, an effort was made to determine fair income-tax base. In this article, the same exercise is undertaken for sales-tax on goods, administered by the Federal Board of Revenue (FBR) under Sales Tax Act, 1990 [“the Act]. The gap of 17 million was established under the income-tax law. The FBR has never mentioned in any of its publications, the total number of registered persons, how many are filing returns, how many showing no tax payable (NIL), dormant businesses (Null), claiming refunds and how many are actually paying taxes and how much. It is shocking that in the latest FBR’s Year Book: 2019-20, there is no mention of persons registered under the Act, as on June 30, 2020. This information and more, like total number of sales tax returns received (sector-wise), amount of refunds paid and payable, number of new cases detected, recovery out of current and arrears demand, cases where appeals are filed and their fate etc. should be updated on monthly basis at FBR’s website. It will help citizens to adjudge the performance of FBR. It is their fundamental right under Article 19A of the Constitution of Islamic Republic of Pakistan [“the Constitution] which says: “Every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law”. Proactive and voluntary disclosures of information of general nature, not disclosing name of any taxpayer, will help in promoting tax culture. The hiding of such data is not understandable. The FBR has claimed that in recent months due to better enforcement, sales tax collection has improved. If this is the case, supporting data should be made public. The successive governments have failed to do so, including the present coalition government of Pakistan Tehreek-i-Insaf (PTI). Advance collection of sales tax at import stage, even after huge contraction of imported goods in fiscal year 2019-20, was 54% of total net collection of Rs. 1596.8 billion. If Customs clear goods grossly under-invoiced or mis-classified or wrong exemptions claimed, the collection of sales tax at import stage suffers heavy losses and resultantly, the importers never declare correct declarations before the Inland Revenue Service (IRS) authorities. Verification of input tax already paid at each stage from raw material to disposal of finished product or direct import and sale of finished goods is a challenge even in developed economies, what to speak of Pakistan, where FBR (both Customs & IRS wings) are not provided even basic facilities of logistics and proper training by successive governments, military and civilian alike. The governments have always been appeasing the rich and mighty through exemptions, amnesties, immunities, waivers and concession and PTI is no exception. According to FBR’s Year Book: 2019-20, against original target of Rs. 2203 billion of sales tax, total net collection for fiscal year 2019-20 was Rs. 1596.8 billion (72.4%) but against revised target of Rs. 1427 billion, exceeded by Rs. 137.6 billion, domestic sales tax (Rs. 720.4 billion) showing growth of 11%, whereas sales tax on imports (Rs. 876.3 billion) registering growth of 8.1%” (overall growth 9.4% vis-à-vis collection of Rs. 1459.2 billion in fiscal year 2018-19). The cursory analysis of FBR’s Year Book: 2019-20 shows an extremely narrow sales tax base. The share of POL products alone at import stage is Rs. 231 billion of total net collection of Rs. 869 billion and under domestic net collection of Rs.720 million is Rs. 235 billion. The total share of one item alone is Rs. 466 billion [29%]. These are official figures and details of sector-wise share in sales tax collection of top ten revenue spinners at import and domestic stage can be seen at page 18 & 19 of FBR’s Year Book: 2019-20. The link is: http://download1.fbr.gov.pk/Docs/2020929129450205FBRREVENUEDIVISIONYEARBOOK2019-20.pdf The World Bank in its report, Project Information Document (PID), updated on April 22, 2019, revealed that out of total 220,042 registered sales tax payers in fiscal year 2017-18 only 141,106 (64%) filed returns and 43,355 (only 20% of registered persons) paid any tax. Recent data shared with them show drastic decrease as in March 2021 (for month of February 2021) on due date about 152,600 were filers, out of which below 32,000 paid tax while rest, NIL or NUL. Even total filers up till to date are less than 186,000 and those who paid any tax were around 39,000. It is now for FBR to refute these numbers and make public the actual figures. It is unfair that data is shared with World Bank and International Monetary Fund but not made public. According to ‘State of Industry Report 2020 by National Electric Power Authority (NEPRA), the total commercial and industrial electricity connections as on June 30, 2020 are 3,716,285 and 370,640 respectively (total 4,086,925). By excluding all not chargeable under the Act e.g. educational institutions, including deeni madrassas (religious schools), hospital/dispensaries, mosques, agricultural sector, and retailers having annual bill of up to Rs. 1.2 million and cottage industries, the fair sales tax base out of 4 million commercial and industrial users comes to around 3 million. Present gap is of 2.8 million (3,000,000 minus 186,000 filers). Sales tax coming through electricity bills as per FBR’s Year Book: 2019-20 is Rs. 91.8 billion. It was second highest after POL at Rs. 234.5 billion. The retailers pay 5% sales tax where the monthly bill amount does not exceed Rs. 24,000 and at the rate of 7.5% where the monthly bill exceeds this threshold. On unregistered additional 3% sales tax is levied. The electricity supplier is bound to deposit the amount so collected directly without adjusting any input tax. In the wake of heavy economic toll of Covid-19 endemic, all businesses and especially small and medium enterprises [SMEs] are still being heavily taxed through sales tax on goods at imports and domestic sales, The main fault lies with the legislators for passing oppressive laws, and the governments giving FBR irrational targets that are achieved at the cost of destroying business growth as 50% taxes given to IRS are collected at import stage. The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS)