ISLAMABAD: Federal Board of Revenue (FBR) Chairman Nisar Muhammad Khan has said that the Income Tax Amendment Bill, 2016 to bring 2.2 million traders in the tax net by urging them to file income tax returns.
The bill was introduced in the Senate on the first of the current month and was subsequently referred to the committee.
While giving a detailed briefing about the bill to Senate Standing Committee on Finance and Revenue, he said that out of 2.8 million traders of the country, only 625,000 of them were filers of while the rest of the chunk was non-filer. As a result, a major portion of the national economy was undocumented.
He said that the scheme was not mandatory as it was optional; therefore, traders were free either to benefit from it or not. So it is wrong to declare the scheme as tax amnesty scheme or a bid to award thieves for not paying tax or for hiding their assets from the tax authorities.
He said that such schemes were very frequent in the world to bring undocumented portion of economy in the tax net.
He further added that people would not prefer to come in the tax net if not provided with concessions or incentives therefore, a number of benefits and advantages had been made part of this scheme. After launch of this scheme with the approval of parliament, then FBR will continuously monitor its success in future.
To a question regarding number of slabs fixed for new taxpayers on the basis of turnover, he said that these slabs had been fixed after detailed and thorough deliberations with almost all the stakeholders. In this regard lethargic and irksome discussions had been continuing for last six months.
With the implementation of this scheme, he said that around 500, 000 new fillers would be added in the existing income tax filers.
Later while briefing the National Assembly Standing Committee on Finance and Revenue, Nisar Muhammad Khan, along with Finance Secretary Dr. Waqar Masood, said that FBR would not compromise on the issue of broadening of tax base (BTB). In this regard, 250, 000 notices had been issued to potential taxpayers to bring them in the tax net in last two years.
In response to observations of the members of the committee, Nisar Muhammad Khan observed that issue of fixation of limit of turnover of any business would be deliberated and recommendations of the committee members would be incorporated in budgetary proposals for the next budget.
Members Strategic Planning, Reforms and Statistics Dr. Muhammad Iqbal while responding to a question asked by Dr. Nafeesa Shah, said that amnesty schemes announced in 1997 could not bring due results just because of non fixation of penalty for non compliance.
However, the current scheme will bring due results because of presence of penalty for evaders. Moreover, it is not an amnesty scheme but a special procedure announced for traders to bring them in tax net.
Similarly, he said that Rs 1 million could be collected out of amnesty scheme announced in 2000 and a meagre amount of Rs 2 billion could be gathered out of amnesty scheme announced in 2008.
