Towards prosperity: Enact taxpayer bill of rights, say experts

Mapping of the potential beneficiaries should be done before announcing amnesties.

ISLAMABAD:

With the economy in tatters, most researchers are of the opinion that if the people of Pakistan start paying their taxes, chances are that the country can be put on the right track towards prosperity.

Presenting the findings of a recently conducted survey in four tax zones --- Rawalpindi, Attock, Jehlum and Chakkwal, experts on Monday suggested the enactment of Taxpayer Bill of Rights to ensure steps that will promote tax justice as lately, only 730,000 of a total of 52 million income earners filed their tax returns in Pakistan.

While addressing a presser, researchers working with USAID-funded TheNetwork project, Pay Income Tax, emphasised on the need to bring more people into the tax net and ending dependence on retrogressive indirect taxation.

The Network for Consumer Protection (TheNetwork) Project Coordinator Asim Jaffry said regular interventions including advocacy campaigns at district levels for the enactment of Taxpayers Bill of Rights --- which includes right to information and assistance, privacy and confidentiality, professional, fair and courteous service, be heard and representation, fair and just tax system, timely remedial action and relief, administrative review and judicial appeal --- must be enacted on time.



Tax expert Ashfaq Tola told The Express Tribune that the prevailing trust deficit between tax payers and FBR has increased over time, mainly because of the top hierarchy of the FBR which, according to him, was not trustworthy in matters including management and administration.

Meanwhile, Jaffry noted that tax in Pakistan was paid mostly by the lower and middle income classes, whereas the upper class was slipping through the cracks for quite a while.

The FBR’s lack of authentic taxpayer data is also a major concern according to Tola, who linked data non-availability of the data to the definition of direct and indirect taxpayers, adding those in the agriculture and real estate sectors were enjoying the benefit of having not to pay a single penny.

Later, Jaffry suggested that the main contours of tax reforms should include improved tax administration, increased agriculture income tax and removal of exemptions given to a selected few in the form of SROs and other measures.

The Muslim League-Nawaz government has made a commitment to its voters that by 2018, the tax-to-GDP ratio will go up by 15 percent --- both in federal and provincial taxes. A similar commitment has also been made with the IMF. The target could only be reached if the FBR adds at least 100,000 new taxpayers to its net each year for the next three years, according to experts.

“Their confusion has lead to a criticism both from the IMF and World Bank --- institutes that are very difficult to convince otherwise,” commented Tola, who added that the packages were good enough, provided the government, like the previous one, offers a practical amnesty blanket.

It was also suggested that the government put an end to appeasing tax evaders and stop offering packages such as the recently-announced Prime Minister’s amnesty package that allegedly encourages whitening of black money, and immunity from tax audit or penalties.

Moreover, it was added that before offering such packages, mapping of the potential beneficiaries and projection of the consequently-generated revenue should also be taken into consideration.

Published in The Express Tribune, December 17^th, 2013.