Saturday, May 25, 2019

MPs not tax-evaders: FBR wants people to join tax net voluntarily, says Shabbar

LAHORE: Federal Board of Revenue (FBR) Chairman Syed Muhammad Shabbar Zaidi said on Friday that the current asset deceleration amnesty scheme was not aimed at collecting taxes but documenting the economy.Shedding light on the ‘New amnesty scheme: a roadmap to stabilising economy’ at an ‘Iftar with Jang’ programme, he admitted the scheme had received lukewarm response from the public. Giving reasons, he said business people were not clear about what the scheme was all about. However, he added, clarification and sensitisation of the public and the businesses about the scheme had been launched.“I believed that by June 25, 2019, you will see a queue of people declaring their assets under the scheme,” he claimed. He said it had become a culture and practice in Pakistan that people did not respond to such schemes immediately and rush at the eleventh hour to avail it.The FBR chairman said that rules and regulations had been made very simple for the present scheme and it had also been published in Urdu language so that people concerned find no confusion in understanding and availing it.Additionally, the payment mechanism for foreign currency had also been made easy with the State Bank of Pakistan (SBP) and now people could also submit taxes in foreign currencies, other than the US dollar. He said that information of Pakistani assets was available with the FBR, but it did not want to initiate any aggressive measures without giving a fair chance to them to declare their assets. He said a comprehensive debate on the tax rate of 4 and 1.5 per cent was conducted before the announcement of the scheme. “But the government was convinced that the scheme was being launched with the basic objective of documenting the economy, instead of collecting taxes.”He said that out of 340,000 individuals registered under the sales tax, only 43,000 are filing their returns. These are the people who should be given a chance, he said adding that the government did not want harassment of taxpayers at the hands of the tax officers. That was why, focus was on system automation and minimising interaction between the taxpayers and the tax officers. However, he warned that action would be launched from July 1, 2019 who would fail to acquire sales tax registration till June 30.The FBR chairman said that the Benami Law was promulgated in 2017 in Pakistan, but not implemented. However, in 2019 it has been enforced. And to save the businesses and public from confiscation of their assets under the Benami Law, it is crucial to give them some transition time to declare their assets to avoid confiscation, he added. He made it clear that no audit would be conducted and no questions would be asked about the assets and source of income under the fresh scheme. Also, if anyone is facing notices or questioning by the FBR officials about the assets deceleration scheme availed in 2018, he must contact the FBR chairman office for relief, he added.He warned that after the end of the current assets declaration scheme time period, it would not be easy to keep money abroad or take away money from Pakistan. Also, the FBR would redefine the resident and non-resident Pakistanis for taxation. “I assure you that in future it will be safer to keep money in Pakistan than aboard, while the rate of return on the business is still higher than anywhere in the world,” he added.The FBR chief said the government was making a policy to completely change the economic paradigm. It is shifting the economic paradigm from trading economy to investment and employment generating economy, as the country had been on the trading economy since 1992.The government wants to save dollars, and move towards the import substitution as Pakistan cannot print dollars to meet its imports needs. It has been rectifying the taxation system in mid- and long-term policy measures by moving towards real income taxation from presumptive income taxation. This may reduce the tax collection, but will make necessary corrections in the taxation system and economy in the long run, he added.The FBR chief said the government was going to review different tax slabs for filers and non-filers, and eliminating the concept of non-filers in the tax laws. He appealed to politicians and political parties not to do politics on economy for political gains, and instead unite on the economic issues.He said a survey of businesses was initiated as the first step to count them in Pakistan, so that a policy about taxation could be made. Also, the Security and Exchange Commission of Pakistan (SECP) has been asked to cancel registration of all those companies which are not filing tax returns. Out of total 100,000 SECP registered companies, half are filing their returns. And if the SECP would not shut down such companies, the FBR would close them down, he said adding that almost 30 per cent of total bank accounts were undeclared. Under the Financial Action Task Force (FATF), Pakistan could not afford such a large number of undeclared bank accounts. For the purpose, the FBR was talking to banks also, he added.Regarding the refund issues of different taxpayers, the FBR chairman said the government had linked the refund bonds with the Central Depository Company (CDC), while both sale and income tax refunds bonds would be issued. Also, the FBR is simplifying the tax code for the Small & Medium Enterprises (SMEs), educational institutions, jewellers and restaurants. He said that a survey of these businesses has been launched. He said that jewellers warned him in a meeting that they would go on strike if the FBR conducted their survey. “I asked them to go on strike as the public knows it well that the FBR only wants to tax the big fish,” he added.About brining the parliamentarians into the tax net, the FBR chairman said it was also a false perception that members of the parliament did not pay taxes. They are not tax-evaders, as they pay taxes on all their businesses, he added.The FBR chief said it is a fact that majority of economic sectors, such as sugar and steel industries, poultry, real estate, etc., are undocumented and various parliamentarians are also engaged with these businesses. Thus, they have no exemption, like common people, from paying taxes. The FBR is working to bring complete sectors under the tax net, instead of targeting individuals, he added.

from The News International - Top Story http://bit.ly/2HAP216

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