ISLAMABAD: The Federal Board of Revenue (FBR) Intelligence and Investigation (I&I) Inland Revenue (IR) has revealed that 13,401 taxpayers filed 37,469 Voluntary Tax Compliance Scheme (VTCS) returns whereas most of them were ineligible for the scheme.
The I&I-IR has highlighted a number of discrepancies such as the majority of taxpayers not obtaining sales tax return numbers.
Sources said that these taxpayers have inflicted a whopping Rs4 billion loss to the FBR by availing VTCS.
The Ministry of Finance had introduced VTCS scheme through Income Tax (Amendment) Act, 2016, in which two types of assessment had been given in order to document and trace the activity of an individual trader.
The government had defined the trader as an individual or an AOP buying goods or merchandise and selling the same without further processing and providing business related after sales services by doing repair jobs.
In the first assessment, the government had offered traders to pay 1 per cent tax in 2015 on up to Rs50 million rupees working capital if the person has not filed income tax return during any of the previous ten tax years before December 31, 2015.
In 2016, the taxpayer was bound to declare turnover which should not be less than three times the working capital declared in tax year 2015 and pay tax according to slab rates which ranges from 0.2pc to 0.1pc of the turnover.
Furthermore, the taxpayers were also bound to pay at least 25pc more tax than paid in the immediately preceding year under the scheme in 2017 as well as 2018.
In the second assessment, the taxpayer who has NTN but filed a return during any previous ten tax years had to be assessed in further two categories with regard to paying 25pc higher tax in 2015 comparable to tax year 2014.
The taxpayers were also eligible for turnover tax according to slab rates under VTCS scheme besides being entitled to take credit of imputable income for the purpose of wealth statement from 2016 to 2018.
Sources claim that there were loopholes in a single page returns prepared by tax department as well as PRAL due to which ineligible people availed the amnesty scheme.
In addition, the majority of traders have not filed returns from 2016 to 2018 despite the fact they are bound to file.
Sources said that there were some ambiguities also in VTCS announced by former Finance minister Ishaq Dar such as a trader having working capital of Rs500 million can file 10 different returns under names of related persons.
They said that senior officials of FBR consider this a dead horse matter due to which the bureau chairman has yet to take any action.
