‘Taxpayers can avoid audit by showing big income growth’
Chief commissioner calls it practically impossible to audit 1.2 million cases
The government was in no mood to further extend the scheme as it had already unearthed a considerable number of cases where people had stashed assets abroad amounting to billions of dollars. PHOTO: FILE
FAISALABAD:
The income tax clause of 214D has been converted into 214E under the amended Finance Act 2018, providing taxpayers with an opportunity to show a substantial enhancement in their taxable income to avoid audit of their accounts, disclosed Inland Revenue Chief Commissioner Muhammad Tariq.
Speaking at an awareness session at the Faisalabad Chamber of Commerce and Industry (FCCI), Tariq told the participants that 1.2 million cases had been picked for audit, which was practically impossible given the circumstances. Hence, a new clause has been added under which income tax returns will be accepted without audit if the taxpayers show up to 32% increase in their taxable income.
He announced that software had been developed and people could take benefit of it up to December 31, 2018. “It will not only facilitate the taxpayers but will also provide additional revenue to the government,” he added.
Earlier, he said, there was no proper system for the income tax audit but now it had been decided that the audit would be conducted after three years of the previous audit.
Responding to a question about high rates of taxes, Tariq stated that the business community believes that they should be linked with the economic growth rate, which was 5.8% last year, but policymakers picked the 6% inflation rate in addition to under-declaration cases to fix new recovery targets.
Quoting tax expert Dr Ikramul Haq’s statement that Pakistan had the potential for collecting Rs8-9 trillion worth of taxes, the chief commissioner said the figure was based on mere speculation, hence, the business community may raise its voice against the unjustified projection.
About the one-window facility, he stressed that it would be replicated shortly with a few amendments. “An officer will check an application and mark all objections and the application will be disposed of in three days, if there is no need for verification,” he said.
Regarding the Alternative Dispute Resolution Committee, Tariq stated that it would be reconstituted and the FCCI would be given due representation.
Major policy shift: Govt allows tax dodgers purchase of cars and real estate
Talking about the last tax amnesty scheme, he pointed out that the government was in no mood to further extend the scheme as it had already unearthed a considerable number of cases where people had stashed assets abroad amounting to billions of dollars.
“The government does not want such persons to avail themselves of this facility anymore,” he added.
Regarding sales tax refund cases, he revealed that refund cases of up to Rs100,000 would be cleared at the level of Regional Tax Offices while larger refund claims would be subject to approval of the government. “The government is interested in clearing the pending refund claims because it may become a permanent sore point like the circular debt,” he said.
Govt faces tough choice as IMF recommends harsh tax measures
Talking about the turnover tax, Tariq was of the view that there was no alternative, but to conduct the audit of these cases. However, in order to settle chronic cases of yarn and grain markets, a separate committee could be constituted to settle genuine cases.
Regarding extension in the date for filing tax returns, he added that the decision could only be made in light of pending cases. However, awareness campaigns have already been launched with the display of banners and distribution of pamphlets.
For the convenience of taxpayers, he said, another session could also be arranged at the FCCI.
Published in The Express Tribune, November 25th, 2018.
The income tax clause of 214D has been converted into 214E under the amended Finance Act 2018, providing taxpayers with an opportunity to show a substantial enhancement in their taxable income to avoid audit of their accounts, disclosed Inland Revenue Chief Commissioner Muhammad Tariq.
Speaking at an awareness session at the Faisalabad Chamber of Commerce and Industry (FCCI), Tariq told the participants that 1.2 million cases had been picked for audit, which was practically impossible given the circumstances. Hence, a new clause has been added under which income tax returns will be accepted without audit if the taxpayers show up to 32% increase in their taxable income.
He announced that software had been developed and people could take benefit of it up to December 31, 2018. “It will not only facilitate the taxpayers but will also provide additional revenue to the government,” he added.
Earlier, he said, there was no proper system for the income tax audit but now it had been decided that the audit would be conducted after three years of the previous audit.
Responding to a question about high rates of taxes, Tariq stated that the business community believes that they should be linked with the economic growth rate, which was 5.8% last year, but policymakers picked the 6% inflation rate in addition to under-declaration cases to fix new recovery targets.
Quoting tax expert Dr Ikramul Haq’s statement that Pakistan had the potential for collecting Rs8-9 trillion worth of taxes, the chief commissioner said the figure was based on mere speculation, hence, the business community may raise its voice against the unjustified projection.
About the one-window facility, he stressed that it would be replicated shortly with a few amendments. “An officer will check an application and mark all objections and the application will be disposed of in three days, if there is no need for verification,” he said.
Regarding the Alternative Dispute Resolution Committee, Tariq stated that it would be reconstituted and the FCCI would be given due representation.
Major policy shift: Govt allows tax dodgers purchase of cars and real estate
Talking about the last tax amnesty scheme, he pointed out that the government was in no mood to further extend the scheme as it had already unearthed a considerable number of cases where people had stashed assets abroad amounting to billions of dollars.
“The government does not want such persons to avail themselves of this facility anymore,” he added.
Regarding sales tax refund cases, he revealed that refund cases of up to Rs100,000 would be cleared at the level of Regional Tax Offices while larger refund claims would be subject to approval of the government. “The government is interested in clearing the pending refund claims because it may become a permanent sore point like the circular debt,” he said.
Govt faces tough choice as IMF recommends harsh tax measures
Talking about the turnover tax, Tariq was of the view that there was no alternative, but to conduct the audit of these cases. However, in order to settle chronic cases of yarn and grain markets, a separate committee could be constituted to settle genuine cases.
Regarding extension in the date for filing tax returns, he added that the decision could only be made in light of pending cases. However, awareness campaigns have already been launched with the display of banners and distribution of pamphlets.
For the convenience of taxpayers, he said, another session could also be arranged at the FCCI.
Published in The Express Tribune, November 25th, 2018.