FBR chief for slashing powers to arrest taxpayers

Published: May 19, 2019
Shabbar Zaidi. PHOTO: FILE

Shabbar Zaidi. PHOTO: FILE

KARACHI: Federal Board of Revenue (FBR) Chairman Shabbar Zaidi has said he has already stopped the FBR officials from making any raids and that he will further decrease discretionary powers of the officials to arrest taxpayers.

“I will also propose to the government to change laws to make it necessary for the National Accountability Bureau (NAB), the Federal Investigation Authority (FIA) and other authorities to consult the FBR before taking any action against taxpayers,” the FBR chief said on Saturday.

Zaidi was talking to members of the Karachi Chamber of Commerce and Industry (KCCI).

He said macroeconomic indicators are bad but attitude of government authorities with business community is also making environment unfavourable for business. This target is to make this environment conducive by reducing trust deficit between the government and business community.

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He said the tax auditing system had not produced any additional income for the FBR. “Instead it had brought a bad name to the FBR”. He said the upcoming amnesty scheme will comprise two basic things – Benami accounts and correct property valuation.

He said 30% accounts in banks are Benami accounts. People open them in morning, use them and close them by end of the day. “However, we do not want to confiscate these 30% accounts. Rather, we want them to turn into legal accounts so that our business system is not disturbed.”

In the last amnesty scheme people declared many of their account but on misguidance of their advisers also concealed accounts in foreign country, he said. “However, now we have strong details about Pakistani accounts in foreign countries; we don’t want that the information be used for harassment.”

Zaidi said: We want to offer this [amnesty scheme] to business community before that information goes to our officers. If the officers are honest they will use that information professionally but, as there are also black sheep in the FBR, they can use that information to harass taxpayers.

“Therefore we want the taxpayers to use this amnesty scheme,” he said.

For the time being, this ministry is giving opportunity to declare actual valuation of property, he said. However, this is not the ultimate solution. Property tax should be minimal and transparent.

“In the long term we are thinking to make property registry transparent. Every property record should be online like that of London property system. Pakistan collects only Rs20 billion per year from property tax which is minimal,” he said.

He said businessmen commit tax evasion with the help of government officers and their advisers.

“I had LUMS University conducted an independent research, according to which 85% benefit goes to businessman, 10% to the FBR officials and 5% to advisers,” he said.

The FBR chief said the country is facing problem of smuggling in the name of Pakistan Afghan Transit Trade. “However, there is also a moral issue that trader sell these smuggled goods even in Ramazan [despite the fact that smuggling is forbidden in Islam].”

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Earlier business community gave different proposals to the FBR chairman.

“I will reduce issuing notices to taxpayers. I will introduce a system that the FBR officials will write a letter to the taxpayer when they see any anomaly in their taxes as notices brings the authority and taxpayer into litigation which consumes lot of time of the FBR and the taxpayer.”

He said there are only 19 lac tax filers while there are lot more business units. I will make a list of shops and business units and send that list to the prime minister to bring them in tax net, he said.

The FBR chief said there are two types of harassment by the FBR – harassment by the organisation and harassment by individuals. “I can stop harassment by organisation by changing rules and regulations but harassment by individuals cannot be stopped immediately. We need to work on culture and ethics.”

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