LAHORE: Prime Minister’s Special Assistant on Revenue Haroon Akhtar Khan has warned that withholding tax on banking transactions will revert to 0.6 per cent for those who will not opt for voluntary tax compliance scheme introduced by the government to facilitate the traders to become part of the tax net and play their role in development of the country.
“The withhold tax on banking transactions will again be 0.6 per cent after the scheme is over as only those will be left out of the net who are not ready to pay taxes. As this tax is levied on non-filers so there will be notices to those who’s banking transactions will be charged at 0.6 percent followed by levy of 35 percent tax and penalties,” Haroon warned while addressing a seminar arranged by the Lahore Tax Bar Association (LTBA).
Haroon also said a ‘Benami transactions act’ is also being introduced before budget as those who have kept undeclared money will be confiscated. He advised the traders to be the part of the newly introduced voluntary tax compliance scheme not for the government but for themselves and for Pakistan.
General Secretary All Pakistan Anjuman-e-Tajran Naeem Mir, Lahore Tax Bar Association President Mansha Sukhaira, General Secretary Qamar -uz- Zaman and others also addressed the seminar while FBR Inland Revenue Policy Rehmat Ullah Wazir briefed the lawyers, traders and officers of the Regional Tax Office (RTO) Lahore about the salient features of the scheme.
Speaking to the gathering Haroon said that it was very unfortunate that wherever we go it is said that out of 200 million people only one million are tax return filers and Pakistan has the lowest Tax-to-GDP ratio in the region. He said introduction of a voluntary tax compliance scheme was not a very easy decision as the leadership had to present out of box issues. He said being a big taxpayer himself he knew how taxpayer dodge the FBR officials, so such a scheme was needed which could help change the mindset of both the taxpayer and the FBR officials.
He said that on assuming the charge of his office both the Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar had advised him to increase the revenues but not to harass the traders community. “It took six months and hard work of day and night to introduce this scheme. There were times when it seemed that negotiations with traders would fail but credit goes to representatives of traders such as Naeem Mir and others who resolved that they had to help the government increasing the tax net besides resolving the issues of the traders,” he added.
Prime Minister’s Special Assistant on Revenue said that these traders belong to different parties but as we were working for Pakistan and not for any party we ignored the party loyalties and just kept national interest in mind. He said that 0.6 per cent withholding tax on banking transactions was an act under compulsion as it was levied only on non-filers. However, it was not the solution as the main issue was to bring the non-documented traders to documented sector.
Traders asked five favours including permission of not submitting a wealth tax statement, no registration under sales tax, not to be as withholding tax agents, exemption from audit and a simple return form. ‘We have given them all these favours. We have convinced all including the foreign funding agencies that such schemes exist in US, Canada and other countries so why not an under developed country like Pakistan introduce such a scheme,’ he said and added that he was unable to understand the objection being raised by the opposition. “Is it not beneficial if we could double the number of tax return filers under this scheme and add Rs 200-250 billion more in the revenue collection,” he questioned. He said that there would be no compromise on meeting the target of Rs 3100 billion revenue this year.
He said that once traders would get themselves registered under this scheme and legitimize their business they would be free to focus on big projects and developments instead of replying to tax notices etc. He said that this scheme has been introduced to facilitate the traders and not to catch any body as FBR had powers to nab any tax evader. He claimed that this was the best scheme in the world and those who would opt it would be free of audit for next four years.
Replying to a query, he said that fears of getting registered under this scheme after four years are present but assured that those who would come to normal regime after this scheme would be facilitated too. He said simplification of tax laws was a part of agenda of the tax reform commission.
