Senate session: Tax amnesty wins razor-thin support

Draft legislation still to be approved in NA, where PPP’s allies vehemently oppose the bill.

ISLAMABAD:

With a narrow margin, the Pakistan Peoples Party (PPP) managed to win approval in Senate on Friday for recommendations on a controversial piece of proposed legislation which seeks tax amnesty for tax evaders, despite strong resistance from its allies.

The real battle, however, is expected to be fought in the National Assembly, where the PPP lacks the numbers to pass the Tax Laws (Amendment) Bill, 2012 – at least if Pakistan Muslim League-Quaid (PML-Q) and Muttahida Qaumi Movement (MQM) continue their resistance.

The lower house is likely to take up the bill on January 14.

Every PPP ally including the Awami National Party (ANP) and the largest opposition party, Pakistan Muslim League-Nawaz (PML-N), have been trying to force the government to withdraw the bill. During Friday’s session, ANP senators staged a walkout after PPP’s recommendations were approved.

The controversial bill seeks “to amend the income tax ordinance, 2001 to provide a mechanism for bringing potential taxpayers into the tax net and to enforce compliance to tax laws, by giving a one-time opportunity to unregistered persons and non-filers to regularise their tax affairs by adopting a simplified procedure.”

“We will oppose this bill by tooth and nail,” said Leader of the Opposition in Senate, Ishaq Dar, who in his dissenting note stated: “This new amnesty scheme of the Federal Board of Revenue (FBR) will discourage honest taxpayers and hamper tax culture. Potential taxpayers of the future might also look for such amnesty schemes.”

The proposed bill aims to promote tax theft culture in the country, he added, urging the government to withdraw the bill. He said if challenged in the courts, the bill would inevitably be struck down.



MQM also opposed the bill. “There is no justification for the government to get such a bill which promotes corruption passed,” observed MQM Senator Col (retd) Tahir Hussain Mashhadi. The bill, which empowers FBR to let the corrupt continue in their ways, is against the spirit of the Constitution, he added.

Senate Finance Committee Chairperson Nasreen Jalil, who also belongs to MQM, also opposed the bill.

Meanwhile, National Party Senator Mir Hasil Bizenjo and Pakistan Muslim League-Q Senator Mushahid Hussain Sayed urged the government to defer the bill, saying they would oppose the bill at any cost.

Finance Minister Abdul Hafeez Sheikh, however, defended the bill, saying that it would help broaden the tax base by facilitating 2.7 million tax-evaders to be brought back into the tax net for a lifetime. This amnesty scheme is not in favour of the government. It’s in favour of Pakistan,” he declared.

The minister added, “This bill will help curtail the harassment by FBR officials against the rich and they will be facilitated to come under the tax net.”

Continuing to defend the initiative, Sheikh said, “We collected Rs350 billion more taxes this year as compared to the last year. This is a one-time incentive to non-tax payers who are wealthy and who travel around the globe but are not contributing to the national cause.”

Published in The Express Tribune, January 5^th, 2013.