Before a Senate committee meeting the other day, Federal Board of Revenue (FBR) Chairman Tariq Bajwa has pinpointed a pressing issue of capital flight from Pakistan. He told the committee that the government is trying its best to ascertain the assets and wealth of Pakistanis in various countries of the world, including Switzerland and the UAE, explaining that it is mandatory for the taxpayers to declare their local and foreign assets in their income tax returns. But a fact remains that the people avoid buying assets and properties in their own names, making it difficult for the tax officials to determine the factual situation. However, he says that the Dubai government has been contacted to get details of the Pakistani investors in that country. The number of income tax returns is pathetic as he points out that 771,000 tax returns had been filed in in 2014, hoping that the number of returns would increase to 900,000 mark this year. He also explained that the government cannot impose taxes, as only the parliament has the authority to do so. However, through clause (b) of the sub section (2) of the section 3 of the Sale Tax Act, 1990, the government has been authorised to increase or decrease the rate of sales tax on any taxable supplies. Bajwa also informed that the government will incur a loss of Rs 68 billion due to a decline in oil import bill to $11.5 billion as compared to $15 billion in the previous year, which will affect the overall revenue collection in the current fiscal year. However, he expressed the hope that the decline in oil prices will have a positive impact on the overall economic development of the country as the overall cost of garment sector has declined by 9 percent and now the industrial units can operate captive power plants for 24 hours due to cheap furnace oil. The per unit electricity price has also been reduced by Rs 2.
It is unfortunate that in a country of 180 million people, the number of income taxpayers has not reached even a million mark. At least 30 million well-to-do individuals have a house in posh area, own a car with at least $12000 per capita income. But they are out of the bound of tax realm despite enjoying every luxury of life in Pakistan.
What Bajwa said before the Senate committee cannot be challenged or denied, as sincerity of even a single individual is a national asset in a country where corruption has been institutionalized. The FBR chief is sincere, but he needs a team of honest officials to devise a system of ruthless accountability not only for the tax evaders, but also for the corrupt officials. As a democratic government is in the office with full mandate of the general public, it should try its best to bring back all the illegal money deposited by Pakistanis in foreign banks. The culture of tax evasion must be discouraged.
