Tax evaders: ICCI hails amnesty scheme for traders

Believes it will encourage documentation of informal economy

ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has welcomed the four-year tax amnesty scheme announced by Prime Minister Nawaz Sharif for the traders.

Terming it a good move, the ICCI said it would help broaden the tax net and improve revenues in the country.

According to the chamber, the main reason for tax evasion in Pakistan is the complicated tax system that discourages many potential taxpayers from coming into the tax net.

It hoped the voluntary tax compliance scheme would have a positive impact as it would encourage documentation of the informal economy by allowing non-filing traders to regularise their undeclared working capital up to Rs50 million by paying a nominal 1% tax for the tax year 2015.

“Withholding tax of 0.6% on banking transactions had become a highly controversial issue between the traders and the government. I hope this scheme would end the deadlock over the issue,” said ICCI President Atif Ikram Sheikh.

“Some countries have also announced similar amnesty schemes for increasing tax revenues. Considering the low tax revenue collection, it is a good measure to discourage unhealthy trends like money laundering and sending money through havala,” he added.

He said currently there were hardly one million taxpayers out of the total population of over 190 million. The scheme would bring improvement in the country’s tax-to-GDP ratio.

“Another advantage is that traders would be exempted from audit for four years and non-filers should take maximum benefit of it,” Sheikh added.

Published in The Express Tribune, January 3^rd, 2016.

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