In a bid to enhance tax revenues, the government has made an abortive attempt to bring foreign remittances into the tax net. Briefing the Senate Standing Committee on Finance and Revenue, Secretary Finance Dr Waqar Masood Khan, said that the tax evaders or non-tax paying people would be subjected to higher withholding tax in the coming budget and the computerised national identity cards would be converted into national tax numbers from July 1 by replacing the NTNs. He also said that the government was considering putting some restrictions on foreign remittances to regulate such transactions. He also informed that under section 11 of the Income Tax Law, banks were required to provide a certificate of encashment of remittances, but tax officials were not authorised to ask questions, which was resulting into a channel of tax theft. According to him, the Federal Board of Revenue held consultations with the State Bank of Pakistan and a case is being taken to the federal cabinet to bring foreign remittances under the tax net.
It is to be noted that the government officials often present novel solutions to important problems and such is the case with imposition of tax on foreign remittances. At least eight million Pakistani diaspora is living in various countries of the world and sends billions of dollars remittances to Pakistan every year to support their families. Though many of the Pakistani expatriates are well-to-do, but a majority of them is living in gulf countries and is working in poor conditions with meager salaries. Their earning is just for a humble living and most of them even cannot afford to build a house during the entire of their lives. Taxing the remittances means the expatriates will find illegal channels to send their money to their families in Pakistan than the scheduled banks. The government itself pushes people to look toward unfair means. God knows who is behind this crazy idea to tax the remittances without going through the ground realities and living conditions of the poor in Pakistan.
The Pakistani society believes in respect of a family and the individuals and it is not like other societies in the region such as India and Bangladesh. People often prefer joint family system and support each other by every means. It is unfortunate that instead of encouraging the well-to-do Pakistani expatriates to invest their money in Pakistan, an effort was made to discourage them to send money even to support their families in Pakistan. However, Finance Minister Ishaq Dar gets kudos for rejecting the idea to tax the remittances.
