Domestic consumers get commercial tax notices

Published: June 23, 2019



LAHORE: In a desperate move to increase tax revenue, the Federal Board of Revenue (FBR) has even sent income tax, general sales tax and federal excise duty (FED) registration notices to domestic power consumers in the provincial capital.

Tax registration notice titled: ‘Request to Get Sales Tax Registration Number and File Sales Tax/FED and Income Tax Return’ – made available to The Express Tribune stated: “As per data available with the Federal Board of Revenue, you are a commercial consumer of electricity; meaning thereby electricity is being used for business purposes.”

It is brought to your knowledge that every person engaged in making taxable supplies in Pakistan is liable to be registered as warranted under section 14 of the Sales Tax Act, 1990. The data further shows that you have not obtained Sales Tax Registration.

The notice continued: “Federal Board of Revenue, in its strive to broaden the tax base, intends to register all those persons who are liable to be registered under Sales Tax Act, 1990 or Federal Excise Act, 2005; or the persons earning taxable income and liable to file return under Income Tax Ordinance, 2001 but who have failed to do so.”

“In order to facilitate the taxpayers in declaring their undeclared income, sales, assets, etc. an [initiative] has been introduced by Government of Pakistan / Federal Board of Revenue which provides for declaration of such income, sales, assets, etc. by 30th June, 2019 at a very concessionary rate,” it further read.

“You may avail the benefit of this last opportunity to declare income, sales, assets, etc. at nominal rates and get registered / file returns, if you have not done so,” the notice advised.

“Please note, after 30th June, 2019, all those persons who are liable to be registered and pay sales tax / federal excise duty; or liable to file income tax return, if failed to do so, may compulsorily be registered / made to file return and duties and taxes would be recovered along with default surcharge and penalty which may also entail prosecution proceedings leading to imprisonment.”

Speaking to The Express Tribune, several citizens complained that both the government and the FBR are harassing common citizens. A local trader, Muhammad Hanif, said investors are already shy due to inconsistent government policies and the unstable economic situation.

He highlighted that every citizen, even a beggar, is under the heavy burden of indirect taxes. “All citizens are paying taxes on the purchase of every commodity and utility.”

The trader pointed out that Prime Minister Imran Khan, in his address to the nation, indicated that the government and FBR had gathered the completed data of tax evaders. “However, such tax registration notices to domestic power consumers indicate otherwise,” Hanif stressed.

Another citizen, Habib Khan, said Pakistan Tehreek-e-Insaf (PTI) came in to power with the promise to recover looted money from bigwigs. “They have been controlling the reins of government for the past 11 months, but have failed to recover a single penny and are stuck in a futile exercise.” He said there has been zero recovery despite the fact that the PML-N and PPP supremos are behind bars.

He highlighted the ‘panicked moves’ of the government’s economic and tax machinery are discouraging investors. “Businessmen and investors are preferring to stay away from any new venture and finding ways to conceal their wealth and assets. Once again, the tax administration is trying to milk existing taxpayers who have made the mistake of getting themselves registered under the tax net.

A businesswoman and mother of three, Mrs Tahir, said all of these developments were a result of ‘adhocism’. She highlighted that former chief justice Mian Saqib Nisar restrained schools from taking fees from parents during summer vacations. “Following his retirement, schools returned to their old practices.”

She claimed a leading private school has asked parents to deposit fee of their children in cash in order to counter the government’s initiative to document all kinds of business transactions. “I believe the desperation to collect more revenue will lead to a major economic crisis as people are finding way to conceal their assets,” she concluded.

Published in The Express Tribune, June 23rd, 2019.

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