The Federal Minister for Finance and Revenue Shaukat Tarin on Friday advised the unregistered potential taxpayers to start paying taxes as he warned them to mend their ways before “we reach you” within a couple of months with documentary evidence of assets.
“I assure the nation that change is taking place, we are utilising technology and will reach all potential taxpayers,” he said while addressing the launching ceremony of National Sales Tax Returns (NSTR), organised by the Federal Board of Revenue (FBR).
The federal minister remarked that with the help of technology, the government would reach people who are dodging taxes. He said the government would no longer have to issue notices for tax collection as it had collected data of "millions of taxpayers".
He explained that the authorities would get to the tax evaders along with their tax returns and would provide them with an opportunity to either prove it wrong by consulting a panel of auditors or pay the due taxes.
“We will not harass [them], we will tell them what they possess. If they don’t pay, then the law would take its own course,” he added.
'Single platform for tax payment'
Besides, the minister congratulated the federal and provincial revenue divisions for huddling on a single platform and making payment of revenues easy for taxpayers.
He noted that since sales tax on goods was the federal domain and the sales tax on services fell under the jurisdiction of provinces, taxpayers were facing problems. However, he added, that now under the single platform, the taxpayers would be facilitated.
He pointed out that in the previous system, a company operating in all the provinces had to navigate through around seven agencies for filing returns with chances of errors plaguing it. However, he added, they would be now required to file a single tax under the new system.
He said that the government was also working on further harmonization of the system to facilitate taxpayers and expressed the hope that ease in the tax deposit system would help enhance revenues.
The minister said that there was no other way, if the country had to progress and prosper, there is a need to enhance revenue collection.
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He cited the example of Germany where he said there was no representation without taxation.
He lamented that there were only 3 million taxpayers out of 220 million population in the country.
He said, out of around Rs18 trillion retail sales, only Rs 3 to Rs 4 trillion were captured and Rs14 million sales are still missing from the tax system.
Speaking at the occasion, Chairman FBR Dr Muhammad Ashfaq Ahmad said that currently, taxpayers were facing different issues due to multiple sales tax registration and payments to 07 different tax agencies, which was enhancing the compliance cost as well enhancing the chance of errors.
Prior to the launching of the NSTR, there was no automatic system among these agencies for sharing tax data, he said adding that the absence of a solution based on technology was creating unending disputes and litigation, besides delaying refunds and adjustments.
He informed that FBR had initiated the NSTR aimed at to development of national income tax returns, constituting inter-agency forum to resolve any issue and simplification of NSTR to further improve the system as well as leveraging data to broaden the tax base for enhancing tax to GDP ratio up to 15% over the short term.
He further said that the initiative would also help in developing single national sales tax registration profiling and automatic compliance management system, besides developing automatic input credit and refund verification as well as distribution of due taxes amongst all revenue collecting authorities.
Dr Muhammad Ashfaq further said that the development of the NSTR system would also help in promoting standardization of taxability and tax rates, besides minimizing human interaction and promoting national harmony and cohesion.
He said that it would also help to create ease of doing business and enforcement of tax compliance.
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