ISLAMABAD: Chairman Senate Standing Committee on Planning and Development and former Interior Minister Rehman Malik counted a foolproof E-filling and E-tax collection system as the sole solution to all the problems confronted by the country’s tax collection apparatus.
“In my point of view, if strenuous efforts are made, our tax collection system can be upgraded in maximum three years; every new company must be referred to the Federal Board of Revenue at the time of registration and no company must be allowed to operate without linking to a centralized system,” Senator Abdur Rehman Malik elaborated while talking to the Customs Today during an exclusive interview.
He stressed that tax must be collected at source to avert any possibility of evasion, adding that some elements in the business community and landlords were involved in tax evasion.
“Look on my part, I am ready to give presentation to FBR on tax evasion and loopholes in the tax collection as no country could survive without revenue collection,” he offered, adding that in the West and developed countries no one could think of tax exemption. “In Pakistan tax policies and laws are usually “twisted and amended” for the benefit of blue-eyed personalities,” he regretted.
To a question about the ‘narrow and stagnant’ tax net despite identification of 3.2 million potential taxpayers, Rehman Malik declared that no one was ready to pay tax in Pakistan and it had become a national tendency and behaviour. He questioned the non-inclusion of agriculture sector in tax net despite the fact that agriculture sector was flourishing by leaps and bounds, adding that in such circumstances how the tax net could be expanded.
The Senate Standing Committee on Planning and Development chairman suggested that the government must announce incentive based tax collection system to encourage the FBR staff for showing better performance.
While commenting on government’s efforts to check depreciation in rupee against dollar, he said that the government had borrowed three trillion domestically which would result in high inflation, price hike besides other repercussions, adding that the government, however, was justified in getting loans due to its international obligations regarding debt servicing. Rehman Malik proposed that baggage of passengers must be declared duty-free at airports because nation had to bear huge losses due to heavy duties which were otherwise did not meant for going into national kitty because heavy duty rates lure people to seek midway and agents often play key role in duty evasion.
“Our Revenue Department is still running with centuries-old system and the main problem faced by the tax system is that implementation of the system has been solely left over to bureaucrats,” he pointed out, adding that the tax machinery could only be improved through the introduction of incorruptible mechanism. He described fudging the figure as another major problem that was threatening the national economy, adding that this very act by government departments often misled the government about available resources and pace of development and progress, restricting the government from devising accurate, correct and practicable development plans as well as fix achievable targets for development and revenue collection.
“In the past figure fudging harassed the government and entire nation and defamed Pakistan internationally, creating suspicions and doubts about Pakistani economy,” he recalled, adding that every government devised fiscal policies in the best interest but factually the size of Pakistan economy was hampering its progress. “Look 65% of the total budget goes to debt servicing either domestic or international, ten percent out of remaining 35% is pilfered; Moreover, six to seven billions dollars have to be paid as international obligations by every government which affects economic performance of the country,” he detailed.
Rehman Malik emphasised that it was time the government managers sat together and mull whether or not the FBR had will or capacity to widen tax net, adding that after a thorough assessment the government should go all-out and overhaul the entire revenue collection system.
Profile
Senator ABDUR Rehman Rehman Malik has been one of the key members of kitchen cabinet of former President Asif Ali Zardari during the PPP regime and even today he is being considered as one of the close confidants of Mr Zardari. Throughout the PPP government, he remained Interior Minister and performed up to the satisfaction of party leadership. Currently besides member of the Upper House of the Parliament, Rehman Malik is Chairperson of Senate Standing Committee on Planning Development and Reform, member Standing committee on Information Technology and Telecommunication, Interior and Narcotics Control and States and Frontier Regions. He is considered an expert on security related issues, however, it was a matter of surprise for the team of Customs Today that he had full grip over economic, finance and tax related issues. He also disclosed to the Customs Today team that his leadership used to grace his viewpoints on economic matters during cabinet meetings.
