Arun Jaitley, Finance Minister of India, announced a feature recently while presenting the Union Budget 2018-19- turning the Permanent Account Number (PAN) into the enterprise unique ID.
The idea is under review, but recent discussion suggests that among the plethora of IDs which are held by enterprises, PAN card is the most conducive option to turn into the unique ID. It will mean that even the non-tax paying entities such as NGPs, Trusts or societies will now have to apply for a PAN card.
It has also been suggested that this PAN number or unique ID can be linked to the Adhaar number as well.
“The whole idea is if all are asked to furnish a PAN number regardless of whether they are income taxpayers or not, and the Aadhaar number is being asked for people who are behind that entity, then this PAN number can be the unifying factor.”- said a government official.
Currently, PAN of taxpaying entities has to be linked with the promoters, directors, and trustees of the companies. By turning PAN number into business unique ID, the government is bringing non-tax paying entities into the tax net.
As the government is looking forward to establishing the bigger ecosystem, it is trying to have a single identity for corporate-like we have for an individual in Aadhaar, so that it’s easy to pull out linkages and data.
This move will bring all entities- tax paying or not, on the same page. This insight may be very useful for the country’s tax system. It will clean up the financial markets and the avenues will be much reduced for untraceable and unaccountable transactions.
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