The lukewarm response to the government’s tax amnesty scheme reveals a bitter fact that the people having taxable income are not ready to enter the taxpayers’ club on easy terms. The government has extended the deadline twice without achieving the desired results and the effort that one million new taxpayers will be added into the tax net ended in fiasco. The Voluntary Tax Compliance Scheme is the brainchild of Finance Minister Ishaq Dar, but even enhancement of withholding tax from three percent to four percent on bank transactions could not prod the non-filers to register themselves with the tax authorities as well as the government has failed to find a moral ground to appease the International Monetary Fund on the benefits of the scheme. The number of non-filers, who have voluntarily availed the opportunity is nearly 5,000 after the expiry of the second deadline. The situation indicates that the government needs to find other options not only to utilize the black money in vital development projects, but also increase tax net without compromising on the honour and dignity of the non-filers.
The traders, on the other hand, want to linger on the scheme up to the end of the current fiscal year, but doing this will not guarantee the success of the scheme in the next fiscal year. It took the government over half a year to launch the venture, but it was shortcut to enhance tax net while an effective mechanism is required to pave the way for investment of alleged black money in the country. The frequent arrests of the money careers show that some regional countries have become safe havens for the black money and this trend can be stopped by providing investment opportunities within the country. The imposition of withholding tax has pushed the traders to stay away from bank transactions and they have started working in cash payments, jeopardizing the whole banking industry. How long the government will go in collecting the withholding tax can be anybody’s guess as the government will have to resign on this account in the long run.
There is a need to bring drastic changes in the tax collection system as well as the government will have to repose trust in its own people. The culture of looking every businessman with suspicions must end it should restore the confidence of the business community not only on the government policies but also on its officials. Those who are expecting that the traders will revert to bank transactions one day are wrong as the business community will only follow the course of action which goes in their favour.
