KSE opposes decision to allow FBR access to bank accounts
Says the move will result in “undue harassment” by tax authorities.
The number of people who pay income taxes in Pakistan is estimated to be roughly two million, while the number of bank accounts totalled 33.5 million on December 31, 2012. DESIGN: FAIZAN DAWOOD
KARACHI:
The Karachi Stock Exchange (KSE) has demanded that the federal government review its decision to allow the Federal Board of Revenue (FBR) access to depositors’ bank accounts.
A statement prepared by the taxation committee of the KSE says that the insertion of Section 165 A in the Income Tax Ordinance 2001 will result in “undue harassment from tax authorities.”
Saying that taxpayers/accountholders will become “very vulnerable to the misuse of the powers given to the tax authorities,” the statement claimed that sacrificing the personal confidentiality of accountholders will reduce their confidence in the documented sector.
The number of people who pay income taxes in Pakistan is estimated to be roughly two million, while the number of bank accounts totalled 33.5 million on December 31, 2012, as per the State Bank of Pakistan’s records. In an interview with The Express Tribune on May 20, former caretaker finance minister of Sindh Shabbar Zaidi had said that the federal government should bring these bank account holders into the tax net by letting the FBR use their data to enhance tax collection.
In an interesting turn of events, Zaidi now finds himself on the taxation committee of the KSE, which is strongly opposed to the idea he so enthusiastically proposed.
“I’m not against the idea of the FBR using accountholders’ information to catch tax evaders. But I’m against the mechanism that has been proposed to do so,” Zaidi said while speaking to The Express Tribune on Tuesday. He said the government should refrain from giving the FBR direct access to bank accounts. “An intermediary agency should be put between banks and the tax-collecting body to minimise incidents of harassment,” he added.
The KSE also requested the federal government to reconsider the levy of 0.5% on net moveable wealth under the Income Support Levy Act 2013, saying it will likely lead to an “immense flight of capital” and encourage a parallel economy.
Published in The Express Tribune, June 26th, 2013.
The Karachi Stock Exchange (KSE) has demanded that the federal government review its decision to allow the Federal Board of Revenue (FBR) access to depositors’ bank accounts.
A statement prepared by the taxation committee of the KSE says that the insertion of Section 165 A in the Income Tax Ordinance 2001 will result in “undue harassment from tax authorities.”
Saying that taxpayers/accountholders will become “very vulnerable to the misuse of the powers given to the tax authorities,” the statement claimed that sacrificing the personal confidentiality of accountholders will reduce their confidence in the documented sector.
The number of people who pay income taxes in Pakistan is estimated to be roughly two million, while the number of bank accounts totalled 33.5 million on December 31, 2012, as per the State Bank of Pakistan’s records. In an interview with The Express Tribune on May 20, former caretaker finance minister of Sindh Shabbar Zaidi had said that the federal government should bring these bank account holders into the tax net by letting the FBR use their data to enhance tax collection.
In an interesting turn of events, Zaidi now finds himself on the taxation committee of the KSE, which is strongly opposed to the idea he so enthusiastically proposed.
“I’m not against the idea of the FBR using accountholders’ information to catch tax evaders. But I’m against the mechanism that has been proposed to do so,” Zaidi said while speaking to The Express Tribune on Tuesday. He said the government should refrain from giving the FBR direct access to bank accounts. “An intermediary agency should be put between banks and the tax-collecting body to minimise incidents of harassment,” he added.
The KSE also requested the federal government to reconsider the levy of 0.5% on net moveable wealth under the Income Support Levy Act 2013, saying it will likely lead to an “immense flight of capital” and encourage a parallel economy.
Published in The Express Tribune, June 26th, 2013.