Daily The Business

Govt urged to ensure due respect for existing taxpayers

Our Special Correspondent

LAHORE: The Friends of Economic and Business Reforms (FEBR) President Kashif Anwar has said that the government must ensure due respect for existing taxpayers and safeguard their rights by legislation against the misuse of discretionary powers by the FBR.

He urged the government to formulate a special scheme for retailers to
bring them into tax net so that tax base should be enhanced.

In a letter written to FBR Chairman Syed Shabbar Zaidi he said if law
makers are serious in broadening the tax base, they have to
restructure the Sales Tax and Income Tax, making taxpayers-friendly
policies, redrafting those sections which have empowered limitless
authorities to them, undermining the rights of taxpayers and refrain
non-filers from becoming part of formal economy.
In the letter, he suggested that for the enhancement of tax base, a
special scheme for retailers should be formulated. “Those retailers
who pay tax 15% more from the previous year by enhancing the turnover
in the same proportion, there should be no audit for them. In this way
the turnovers will increase by 100% after five years and substantial
amount of tax will be collected.”
He proposed that it should be mandatory for all retailers to make
verifiable purchases and feed them in their annual income tax return.
Otherwise, their returns should not be acceptable.
“In order to enhance documentation, slabs of turnover should be made.
As the Turnover increases, the rate of tax must reduce
proportionately. Those retailers who adopt this scheme should be
exempt from minimum tax at Rs.10Mn and becoming withholding agent at Rs.50 million.”
Kashif Anwar called for legislations through parliament to safeguard
the rights of existing taxpayers.
The former vice president of the Lahore Chamber of Commerce &
Industry, asked the economic team of the government to respect
existing taxpayers and safeguard their rights by legislation against
the misuse of discretionary powers by the FBR.
Create harmonization between Sales Tax & Income Tax laws by removing those provisions which conflict with each other, he said and suggested to enhance tax base by automation and integration of revenue departments with other public entities.
It is very important in current economic conditions of Pakistan to
increase the tax base and enhance revenue collection to cater the
augmenting fiscal deficits. It is a bitter reality that the compliance
of law has become very difficult and is for those who are in the tax
net like audits, submission of statements, returns, maintenance of
record etc.
Due to lack of awareness and low literacy rate, no one is fully aware
of the daily changes in tax laws. A filer is always under the fear of
being questioned by the tax authorities and as per law a person who
has an NTN is eligible for audit. In order to win the confidence of
retailers and bring them in the tax net, the government should
formulate for them a special scheme over a period of Five years.
He said that the government has to highlight the benefits for those
who are in the tax net which incentivizes and stimulates the
unregistered persons to contribute voluntarily towards documentation
of the national economy.
Appreciating the government, he said that owing to prudent, timely and
swift tax reform policies of the government, the income return filing
base has widened by around 43 percent to the record level of 2.5
million filers, as 0.750 million new return tax-filers have registered
themselves in the tax system so far.

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