ISLAMABAD: Senate Standing Committee on Finance has directed the Federal Board of Revenue (FBR) to convene a meeting of Azad Jammu and Kashmir (AJK) Council and Gilgit-Baltistan (GB) Council to resolve the double taxation issues in their respective areas.
The committee met here with Senator Saleem Mandviwala in chair and discussed different agenda items including the double taxation issues in AJK and GB.
FBR Member Rahamat ullah Wazir informed the meeting that AJK and GB were collecting the tax with their respective councils and not considering the active taxpayers list of the FBR. The committee was informed that companies operating in these areas were paying double tax as a tax filer in FBR was “treated as no-filer in AJK and GB”.
The committee directed to resolve the issue in order to facilitate the companies operating in these areas as well as to avoid the double taxation.
Meanwhile, the FBR officials refused to share risk-based parameters used for selection of cases for audit (Tax Year 2015) under a new audit policy and stated that parameters were declared confidential through an amendment in the Finance Bill 2013.
Briefing the committee over the audit policy, the FBR officials said that a paradigm shift in the audit policy was made in 2016 by shifting from random balloting to risk parameters.
Under the criteria, a total of 1.2 million income tax returns were processed through risk-based parameters for selection of cases for audit and 0.7 million fallen under the categories of taxpayers were excluded from audit as the same were not fallen under risk-based parameters. Out of remaining five hundred thousands, 93,276 were selected for audit under risk parameters, said the officials.
They claimed that the shift from random balloting to risk parameters in taxpayers’ audit will not only promote compliance with the existing tax laws but will also generate increased revenue through better declarations for better public spending by the government.
The committee was also informed that four Large Taxpayers Units (LTUs) and 18 Regional Tax Offices (RTOs) were working in the country to collect the revenue as well as facilitate the taxpayers.
Tax officials claimed that in order to obviate chances of mis-declaration in the import of used auto parts, a comprehensive special procedure for examination of such goods has been prescribed and all consignments of old and used auto parts are subjected to 100% examination.
They further stated that in order to discourage import of old and used auto parts, contraventions have been made out against such imports and forwarded to the adjudicating authorities for adjudication.
The adjudicating officers confiscate the old and used auto parts and a minimum fine of 20% of value of such goods is imposed, in lieu of confiscation, which is over and above the customs duties, other taxes and penalties imposed under relevant law.
The committee and FBR officials agreed that either redemption fine on the import of old and used parts being imported in the form of scrap should be increased sufficiently to the level of the rate imposed on the brand new vehicle or the imported stuff should be out-rightly confiscated.
On another agenda item regarding the import of auto parts in shape of scrap, Senator Mian Muhammad Atique Shaikh observed that it was destroying the local auto industry.
The Member informed the committee that suggestion of the meeting would be implemented to overcome the issue including enhancing the duty on the import of such scrape.
The committee also deferred government’s Bill “The Public Private Partnership Regulatory Bill, 2016 for further deliberation and Private member bill titled ‘The Partnership (Amendment Bill, 2016).
The Senators, Ilyas Ahmad Bilour, Mohisn Khan Leghari, Muhammad Talha Mehmood attended the meeting.
