Taxmen perturbed: Tax concessions to business disturb budget targets
Continuous changes in tax laws make revenue generating measures irrelevant.
According to the FBR, the salaried people are paying more taxes than the businessmen who are earning more than the salaried class. CREATIVE COMMON
ISLAMABAD:
Perturbed by a host of relaxations given by the government to affluent industrialists that are undermining efforts to enhance revenues, the country’s top tax collecting agency has said concessions offered to the business community have made this year’s budget irrelevant.
The business community had proved strong enough in exerting pressure in a manner that the Federal Board of Revenue (FBR) had been unable to stand its ground, according to Shahid Hussain Asad, Member Inland Revenue Policy of the FBR.
He was speaking at a seminar organised by the Sustainable Development Policy Institute on tax and energy reforms here on Friday.
Asad’s comments came a day after Prime Minister Nawaz Sharif announced an amnesty scheme for industrialists. According to the scheme, the source of income will not be asked on investments in new and existing projects. Penalties on late filing of income tax returns have been waived and conditions for audit have been relaxed, undermining the government’s campaign to bring big fish into the tax net.
“The reality is that the business community is very strong and not ready to bear the burden according to its capacity,” according to an FBR official. He said the FBR had made the budget while keeping in mind the tax collection target of Rs2.475 trillion for the current fiscal year.
So far, the official said, all the Statutory Regulatory Orders (SROs) – a legal instrument used to amend tax laws – that the FBR issued in the last five months had been on the demand of the business community. “If parliament’s approved budget is not acceptable to the people, then the right of reversing those decisions should also be exercised by parliament,” he suggested.
“The FBR is fed up with issuing SROs and is ready to surrender this power to parliament,” the official added.
Finance Minister Ishaq Dar revealed on Thursday that during the short tenure of his government the business community had presented 26 demands and the government accepted and implemented 25 of them while the last was at the approval stage at the Ministry of Law.
The amnesty scheme is also said to have drawn attention of the international donor community and they have started collecting information before making recommendations to their headquarters.
Schemes that helped rich people legalise their black money were being introduced to give a safe passage to the corrupt, commented Pakistan Tehreek-e-Insaf Chairman Imran Khan on Friday while criticising the amnesty scheme.
FBR’s biggest revenue spinning measures have become irrelevant because of continuous changes in laws. The wealth statement filing condition has been relaxed on the demand of the business community. So far, 10,251 taxpayers not belonging to the salaried class have filed wealth statements and declared assets of over Rs1 million.
According to the FBR, the salaried people are paying more taxes than the businessmen who are earning more than the salaried class.
The FBR is questioning who will implement the law in such circumstances where the businessmen
have more say in the power corridors than the taxmen.
The premier has also barred the FBR from accessing bank accounts of existing taxpayers, that too on the demand from the industrialists and traders.
FBR officials suggest that the taxation system should be transparent and no SROs should be issued.
Shahid Asad, who is also the spokesman for the FBR, said the FBR had not stopped the audit process. The audit would continue but those new taxpayers, who pay a minimum tax of Rs25,000 and the existing taxpayers who declare a 25% increase in their income, would be exempt, he said.
Asad said the PM had also directed to review the possibility of reducing income tax rates and the FBR would consider it for the next financial year, adding the government also wanted to reduce the sales tax rate to single digit.
Published in The Express Tribune, November 30th, 2013.
Perturbed by a host of relaxations given by the government to affluent industrialists that are undermining efforts to enhance revenues, the country’s top tax collecting agency has said concessions offered to the business community have made this year’s budget irrelevant.
The business community had proved strong enough in exerting pressure in a manner that the Federal Board of Revenue (FBR) had been unable to stand its ground, according to Shahid Hussain Asad, Member Inland Revenue Policy of the FBR.
He was speaking at a seminar organised by the Sustainable Development Policy Institute on tax and energy reforms here on Friday.
Asad’s comments came a day after Prime Minister Nawaz Sharif announced an amnesty scheme for industrialists. According to the scheme, the source of income will not be asked on investments in new and existing projects. Penalties on late filing of income tax returns have been waived and conditions for audit have been relaxed, undermining the government’s campaign to bring big fish into the tax net.
“The reality is that the business community is very strong and not ready to bear the burden according to its capacity,” according to an FBR official. He said the FBR had made the budget while keeping in mind the tax collection target of Rs2.475 trillion for the current fiscal year.
So far, the official said, all the Statutory Regulatory Orders (SROs) – a legal instrument used to amend tax laws – that the FBR issued in the last five months had been on the demand of the business community. “If parliament’s approved budget is not acceptable to the people, then the right of reversing those decisions should also be exercised by parliament,” he suggested.
“The FBR is fed up with issuing SROs and is ready to surrender this power to parliament,” the official added.
Finance Minister Ishaq Dar revealed on Thursday that during the short tenure of his government the business community had presented 26 demands and the government accepted and implemented 25 of them while the last was at the approval stage at the Ministry of Law.
The amnesty scheme is also said to have drawn attention of the international donor community and they have started collecting information before making recommendations to their headquarters.
Schemes that helped rich people legalise their black money were being introduced to give a safe passage to the corrupt, commented Pakistan Tehreek-e-Insaf Chairman Imran Khan on Friday while criticising the amnesty scheme.
FBR’s biggest revenue spinning measures have become irrelevant because of continuous changes in laws. The wealth statement filing condition has been relaxed on the demand of the business community. So far, 10,251 taxpayers not belonging to the salaried class have filed wealth statements and declared assets of over Rs1 million.
According to the FBR, the salaried people are paying more taxes than the businessmen who are earning more than the salaried class.
The FBR is questioning who will implement the law in such circumstances where the businessmen
have more say in the power corridors than the taxmen.
The premier has also barred the FBR from accessing bank accounts of existing taxpayers, that too on the demand from the industrialists and traders.
FBR officials suggest that the taxation system should be transparent and no SROs should be issued.
Shahid Asad, who is also the spokesman for the FBR, said the FBR had not stopped the audit process. The audit would continue but those new taxpayers, who pay a minimum tax of Rs25,000 and the existing taxpayers who declare a 25% increase in their income, would be exempt, he said.
Asad said the PM had also directed to review the possibility of reducing income tax rates and the FBR would consider it for the next financial year, adding the government also wanted to reduce the sales tax rate to single digit.
Published in The Express Tribune, November 30th, 2013.