According to the FBR, the salaried people are paying more taxes than the businessmen who are earning more than the salaried class. CREATIVE COMMON
Perturbed by a host of relaxations given by the government to affluent industrialists that are undermining efforts to enhance revenues, the country’s top tax collecting agency has said concessions offered to the business community have made this year’s budget irrelevant.
The business community had proved strong enough in exerting pressure in a manner that the Federal Board of Revenue (FBR) had been unable to stand its ground, according to Shahid Hussain Asad, Member Inland Revenue Policy of the FBR.
He was speaking at a seminar organised by the Sustainable Development Policy Institute on tax and energy reforms here on Friday.
Asad’s comments came a day after Prime Minister Nawaz Sharif announced an amnesty scheme for industrialists. According to the scheme, the source of income will not be asked on investments in new and existing projects. Penalties on late filing of income tax returns have been waived and conditions for audit have been relaxed, undermining the government’s campaign to bring big fish into the tax net.
“The reality is that the business community is very strong and not ready to bear the burden according to its capacity,” according to an FBR official. He said the FBR had made the budget while keeping in mind the tax collection target of Rs2.475 trillion for the current fiscal year.
So far, the official said, all the Statutory Regulatory Orders (SROs) – a legal instrument used to amend tax laws – that the FBR issued in the last five months had been on the demand of the business community. “If parliament’s approved budget is not acceptable to the people, then the right of reversing those decisions should also be exercised by parliament,” he suggested.
“The FBR is fed up with issuing SROs and is ready to surrender this power to parliament,” the official added.
Finance Minister Ishaq Dar revealed on Thursday that during the short tenure of his government the business community had presented 26 demands and the government accepted and implemented 25 of them while the last was at the approval stage at the Ministry of Law.
The amnesty scheme is also said to have drawn attention of the international donor community and they have started collecting information before making recommendations to their headquarters.
Schemes that helped rich people legalise their black money were being introduced to give a safe passage to the corrupt, commented Pakistan Tehreek-e-Insaf Chairman Imran Khan on Friday while criticising the amnesty scheme.
FBR’s biggest revenue spinning measures have become irrelevant because of continuous changes in laws. The wealth statement filing condition has been relaxed on the demand of the business community. So far, 10,251 taxpayers not belonging to the salaried class have filed wealth statements and declared assets of over Rs1 million.
According to the FBR, the salaried people are paying more taxes than the businessmen who are earning more than the salaried class.
The FBR is questioning who will implement the law in such circumstances where the businessmen
have more say in the power corridors than the taxmen.
The premier has also barred the FBR from accessing bank accounts of existing taxpayers, that too on the demand from the industrialists and traders.
FBR officials suggest that the taxation system should be transparent and no SROs should be issued.
Shahid Asad, who is also the spokesman for the FBR, said the FBR had not stopped the audit process. The audit would continue but those new taxpayers, who pay a minimum tax of Rs25,000 and the existing taxpayers who declare a 25% increase in their income, would be exempt, he said.
Asad said the PM had also directed to review the possibility of reducing income tax rates and the FBR would consider it for the next financial year, adding the government also wanted to reduce the sales tax rate to single digit.
Published in The Express Tribune, November 30th, 2013.
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COMMENTS (8)
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Income support levy was not the biggest revenue spinner but an instrument to kill poor salaried class so that they cannot even retire with their life savings like GP fund and even pensioners are being robbed in the name of income support levy, where the amount of pension is even not sufficient to purchase 200 units of monthly electricity??/
Can you imagine, a land lord, a mill owner or a politician who builds wealth in Saudi Arabia or Australia, pay this tax or even disclose his assets, those who steal electricity and never pay their taxes and bills and the burden is put on the common man who pays his taxes and pays his bills
The joke is that FBR has not designed wealth tax return form to disclose assets located out of the country??
Because having wealth in Saudi Arabia or Australia, is not the wealth of Pakistan. How can a poor family class Pakistani when he becomes politician be so rich, while he earned his bread and naan from Pakistan but accumulated his wealth in Saudi Arabia or Australia??
The FBR has been given powers to locate assets within Pakistan but can FBR touch the assets of the corrupt politicians out of Pakistan, no, because it is against the constitution to touch the politicians
Income support levy was not the biggest revenue spinner but an instrument to kill poor salaried class so that they cannot even retire with their life savings like GP fund and even pensioners are being robbed in the name of income support levy, where the amount of pension is even not sufficient to purchase 200 units of monthly electricity??/
Can you imagine, a land lord, a mill owner or a politician who builds wealth in Saudi Arabia or Australia, pay this tax or even disclose his assets, those who steal electricity and never pay their taxes and bills and the burden is put on the common man who pays his taxes and pays his bills
The joke is that FBR has not designed wealth tax return form to disclose assets located out of the country?? Because having wealth in Saudi Arabia or Australia, is not the wealth of Pakistan. How can a poor family class Pakistani when he becomes politician be so rich, while he earned his bread and naan from Pakistan but accumulated his wealth in Saudi Arabia or Australia?? The FBR has been given powers to locate assets within Pakistan but can FBR touch the assets of the corrupt politicians out of Pakistan, no, because it is against the constitution to touch the politicians
@meekal a ahmed:
you are very right. this government only want to rob the poor employees and salaried class people.
thier very aim is to benefit land lords and deprive the people who can not afford even their own homes within city limits.
thier low cost housing scehmes are also meant to dislocate the common people from their current place of livings.
indeed they want to pack up the poor people out of the towns and cities and crush them there in an unwanted land / place.
the ultimate tax burden is only on those honest tax payers which is the salaried class as they can not hide their income like the business man or the land lord who never filed a income or wealth tax retrun, and the poor salary class [ excluding the establishment and bureucrates who enjoys lot of exemptions in taxes] are taxed at source i.e first they pay tax and then they take salary.
@Gp65:
Good question, since the staff report is being written as I write this.
It will certainly make the case for approval of the second tranche more complicated. You can't keep doing things that fly in the face of what you have agreed to do as part of the EFF.
Sad I supported PMLN. All these rich people eating away our money and we act like slaves and pay taxes.
We need to accept the fact that these concessions/exemptions/amnesties/waivers/tax reductions/sweetheart deals for the rich and powerful have been, and will remain, the hall-mark of this government's economic policies.