Monday, October 26, 2020

FBR chairman pledges long term reforms in tax system

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Zain Zubair
Zain Zubair
Zain Zubair is a staff writer for World News Observer. He is studying ACCA in Pakistan. Besides Accountancy and writing pieces, he loves cooking and nature photography. Zain has attended various modern journalism workshops. Contact: [email protected]

Chairman Federal Board of Revenue (FBR) Syed Shabbar Zaidi Saturday pledged for long term reforms in tax system.

Addressing the industrialists and businessmen at Karachi Chamber of Commerce on Saturday, FBR said there was nothing unclear in tax amnesty scheme law and neither it will be amended in the finance bill.

Zaidi said that Afghan Transit Trade is not the only path being used for smuggling in Pakistan. Selling smuggled items on shops is also against the principles of Sharia,

FBR chairman said. “Our industry also used for fraud,” Shabbar Zaidi said. He vowed for long term reforms in the taxation system. He promised that the FBR will avoid unnecessary audit of the taxpayers. He said the government could consider relief in duty on some raw materials of industries but not on all items.

FBR chairman said that he will present the data about the number of shops and companies in the country. Around seven lac industrial units are functioning in Punjab.

He said he was unaware about the number of industrial units in Sindh right now and the shops in markets and number of taxpayers among them. Around 1.9 million people are income tax filers in Pakistan, Zaidi said.

FBR’s PERFORMANCE

  • FBR needs to collect Rs1.397 trillion during the last two months of the current fiscal year of 2018/19 to achieve revenue collection target of Rs4.39 trillion.
  • It has provisionally collected Rs2.993 trillion in the July-April period of 2018/19, up 2.4 percent year-on-year.
  • The collection is a record Rs345 billion short from the Rs3.35 trillion ten-month target.
  • The FBR managed to collect Rs919 billion during May and June of the last fiscal year and that included Rs90 billion generated owing to amnesty scheme announced last year.
  • FBR officers have reportedly lost hope of maximizing revenue collection during the last two months owing to latest instructions issued by the newly-appointed FBR chairman. They are unanimous that revenue collection would not be increased in such a scenario where the Chairman has given strict instructions not to harass the tax payer and employ arm twisting techniques to extract maximum taxation.

KCCI stalwarts discussed various issues including Amnesty scheme, tax reforms with the chairman FBR.

 

REFORMS REQUIRED UNDER INCOME TAX ORDINANCE, 2001

After the Amnesty Scheme, KCCI proposed the following changes in the Income Tax Ordinance:

Clause 84, Part IV, Second Schedule to the Income Tax Ordinance, 2001, providing immunity to investors for probing source of investment in Greenfield industrial undertaking, should be extended beyond period of June 30, 2019. Constitution and judicial protection as specified above should be incorporated to generate more confidence among the investors.

Steps shall be taken to provide for definition of greenfield industrial undertaking to clarify the legislation intention; and Rule 2 of the Eight Schedule to the Income Tax Ordinance, 2001, which provided immunity to investors who made investment in Pakistan Stock Exchange for a prescribed period, should be extended for foreseeable future with precondition of one year or less investment period. Further, requirement to seek certificate from concerned broker / NCCPL for fulfillment of condition of investment period should also be prescribed.

Zain Zubair
Zain Zubair
Zain Zubair is a staff writer for World News Observer. He is studying ACCA in Pakistan. Besides Accountancy and writing pieces, he loves cooking and nature photography. Zain has attended various modern journalism workshops. Contact: [email protected]

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