Tax amnesty bill clears first hurdle

Senate panel approves the bill despite opposition from PML-N, MQM.

ISLAMABAD: The government on Friday managed to clear the first hurdle after a parliamentary panel gave the green light to a controversial tax amnesty bill, but it is likely to face stiff resistance at the time of voting on the bill in both houses of parliament.

The opposition Pakistan Muslim League-Nawaz has already made it clear that it will not support the bill in parliamentl.

The Muttahida Qaumi Movement (MQM), a partner in the ruling coalition, sprang a surprise by voting against the bill in the Senate Standing Committee on Finance and Revenue that met here.

The viewpoint of another coalition partner, the PML-Q, was not clear as Senator Chaudhry Shujaat Hussain did not come to the meeting.

“MQM cannot support this bill as the government does not have moral authority to approve a scheme when its tenure is going to end very soon,” said MQM’s Senator Nasreen Jalil, who is also chairperson of the committee.

She added her party is also against giving sweeping powers to the Federal Board of Revenue (FBR) under the garb of amnesty. This is injustice to honest taxpayers and FBR should instead focus on catching the identified 200,000 big fish, she added.

Thanks to the support extended by the Awami National Party and Balochistan National Party-Awami (BNP-A), the government managed to get the bill passed by a majority of 4-2. PPP senators supported the bill while PML-N’s Senator Ishaq Dar opposed.

After the go-ahead given by the Senate panel, the bill will now be tabled in the Senate for approval.



In the amnesty plan, the government has proposed amendments to the Finance Bill 2012-13 aimed at giving blanket amnesty to tax dodgers. According to the bill, the tax evaders can opt for the scheme by paying a fee of Rs40,000 to Rs70,000 and declare their income and assets up to Rs5 million. Hidden assets and income valuing over Rs5 million can also be declared by paying an additional 1% to 1.5% tax.

In support of the bill, the government argues that out of 180 million people, only 0.3% pay income tax and through normal means this extremely narrow tax base cannot be expanded.

In an attempt to allay concerns, the Senate panel introduced an amendment to the original bill, proposed by Senator Ilyas Bilour of ANP.



According to the amendment, any person, whether politician, bureaucrat or military man that has remained associated with the present dispensation in any capacity, cannot avail of the amnesty scheme. Minister of State for Finance Saleem Mandviwalla endorsed the amendment.

Ishaq Dar said the government should not usurp the right of next parliament and instead focus on targeting the 200,000 big tax evaders out of the identified around three million people.

Commenting on the FBR chairman’s statement that FBR has a goldmine in shape of comprehensive data of three million tax evaders, Dar remarked that the government should not sell this “goldmine like Reko Diq mines, which it sold at throwaway prices”.

Defending the bill, FBR Chairman Ali Arshad Hakeem said FBR wanted to give a last chance to the tax evaders. He pointed out that out of roughly three million people, the FBR has set aside 200,000 who would not be allowed to opt for the amnesty scheme.

These people are the ones who have tax liabilities in millions of rupees, he said, adding the remaining 2.7 million are traders and newly rich people.

Hakeem cautioned that if parliament did not approve the scheme, then the FBR would resort to harsh measures to force people to pay taxes.

Published in The Express Tribune, January 5^th, 2013.

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