ISLAMABAD: Federal Board of Revenue (FBR) Chairman Nisar Mohammad Khan has said that the FBR had done a lot of work to check under-invoicing and menace of smuggling during the last two years.
While briefing the National Assembly Standing Committee on Finance and Revenue, he said that taxation system had been largely based on indirect taxes for the last 68 years in the country.
On the beginning of current month, Finance Minister Ishaq Dar presented amnesty scheme bill in the National Assembly for easing of businessman up to Rs 500 million after paying taxes. Under Income Tax ordinance 2001 (Amendment) bill different privileges have been provided for the tax defaulters.
Even over 70 percent indirect taxes had been introduced during the last two finance bills and as a result current ratio of indirect taxes in the total tax system amounts to over 40 percent,” he said, adding that “by burdening the poor with more indirect taxes, we had been pushing the poor people into the vicious circle of poverty.”
To a question about reduction in tax rates in the country, Nisar observed that country would afford reduced tax rates when the tax base would be broadened. However, parliament reserves the prerogative to propose recommendations for reduction in tax rates as well as to pass these recommendations.
Responding to observations about Volunteer Tax Scheme, Nisar added that it was not an amnesty scheme but a sincere effort to bring more and more people in tax net. Moreover, the scheme was an optional for traders and not mandatory, therefore it was up to the people either to benefit from it by joining the scheme or not.
He further briefed the committee that the said scheme had been prepared after extensive discussions with all the stakeholders as well as taking the concerned quarters into confidence. This was why trade bodies and representative organizations of the business community, Chambers of Commerce and Industries, were reposing confidence in this scheme. On this basis, the possibilities for the success of this scheme can be expected.
It is pertinent to note here that traders by depositing 0.2 % at Rs 5 crore, one lac rupee cash over Rs 25 crore and 0.15%, whereas four lac over Rs 25-50 crore and 0.1%, will give legal status to its business for depositing the amount.
