FAISALABAD. Amnesty Scheme had become imperative to stabilize national economy and business community must avail from it to harvest its individual as well as collective benefits, said Sheikh Muhammad Tariq Chief Commissioner Regional Tax Office (RTO) Faisalabad.
Addressing a seminar on Tax Amnesty Scheme in Faisalabad Chamber of Commerce & Industry (FCCI) here today, he said that the ultimate objective of this scheme is to reduce dependence on foreign loans by generating local resources through documentation of economy, expansion in tax net and visible reduction in tax rates etc.
He endorsed the demand of FCCI to expand the tax net but said that generally it is misunderstood and restricted to the addition of only new tax payers. “It is equally applicable to the existing tax payers who are not paying their due share of taxes”, he added.
About high tax rate, Chief Commissioner RTO said that it should be equal to the rate applicable in other regional countries. “But presently it is on higher side in Pakistan”, he said and added that tax rate for Companies is 27% which is now being trimmed to 24%.
He further said that tax on rental income should be on higher side whereas tax on businesses should be comparatively less but this situation is altogether reverse in case of Pakistan.
He said that there is dire need to increase the rate of taxes on income generated from dividends, rent and other such investments. He said that government and FBR are already working on the proposal.
Continuing, he said that when government slashes down the tax rate, the revenue collection also dips and hence government has to again levy super tax to meet this shortfall.
Identifying the problems in our taxation system, he said that rate of tax should be equal to the other regional countries and in this connection government is making serious efforts.
Regarding a question about builders, he said that under the amnesty scheme, the price of super structure has been determined at Rs.400 per square foot. “But in this case at the end of the day the profit will be unrealistically high which may create many complications for them”, he added.
“Similarly, the determination of market rates of stocks may be another bone of contention between tax payer and tax collectors”, he added.
However, he assured that in case of a minor difference, the FBR will adopt a softer stance but in case of heavy difference action would be taken according to the law.
He urged upon the business community to avail from this scheme as it is going to expire before June 30.
He said that we should also settle down identified erotic points before this date so that people could declare their assets with satisfaction and equanimity.
Renowned tax consultant Mr. Hamid Masood gave a detailed presentation. He specifically pointed out different clauses which may create difference between tax payer and tax collectors during the implementation on this amnesty scheme. He also mentioned some clauses of taxation system and said that under section 116 ratification was allowed for unintentional errors but under section 116 A this facility has been withdrawn. He was optimistic that government will restore this clause in its original form during upcoming Federal Budget.
He told that there will be zero tax on the income up to Rs.1.2 million while there would be 5% deduction on income up to Rs.2.4 million.
He told that Prime Minister has announced that from July this year, all rates previously determined by FBR or DC would be withdrawn and on one percent tax would be received on property transfer.
“This proposal has not yet been finalized but it is expected that it will be legalized in new Federal Budget 2018-19”, he added.
Earlier in his address of welcome Acting President Faisalabad Chamber of Commerce & Industry (FCCI) Mr. Farooq Yusuf said that taxes are lifeline of development process but tax to GDP ratio is abysmal poor in Pakistan. He said that government has claimed to increase it from existing 10.5 % to 12 to 13% but no visible improvement has been witnessed. “This situation has made the fiscal deficit uncontrollable”, he said and added that there is only one available option that tax base should be enhanced with reasonable reduction in tax rates. He further said that the process for development of economy is not up to the mark which is hindering increase in tax base. Commenting on the new tax amnesty scheme, he said that it is a positive step for the economy, business community and public. “No doubt it also has its own inherent merits and demerits but FCCI is of the opinion that the spirit behind this scheme should be to enhance to tax base and provide maximum relief to the businesses”, he said and added that in this perspective it will not only reinvigorate the national economy but government will also get enough revenue to complete its ongoing development schemes in addition to launching new projects. Mr. Farooq Yusuf said that according to a conservative estimate Pakistanis have assets of 150 billion dollar abroad. “Out of which 40 billion dollars have been invested in real estate sector”, he said and added that if government succeeded in the repatriation of only 50% of these assets, it will help Pakistan to undertake maximum infrastructure development projects from its own resources instead of depending on foreign loans. He further said that FCCI believe that Amnesty scheme should be implemented in greater national and economic interest as four such amnesty schemes during last 5 years have failed to give the expected results. He further said that this scheme may also discourage the honest tax payers who are full filling their national obligations by pay 30% tax to the national kitty. He further said that the policy makers should also consider and identify the causes of regular capital flights. He said that no doubt it is directly linked with our internal stability coupled with complicated tax system and high rates of taxes. He also thanked to Chaudhary Muhammad Tariq Chief Commissioner RTO for organizing this seminar in FCCI and hoped that it will help our members to understand the pros and cons of this amnesty scheme with complete clarity.
Chaudhary Tallat Mehmood, Obaid Ullah Sheikh, Rana Maroof Bhatti, Rana Sikander Azam, Muhammad Anwer and Syed Mazher Hussain Rizwi participated in the question answer session while Vice President FCCI Mian Usman Rauf offered vote of thanks.
Later Acting President FCCI Sheikh Farooq Yousaf presented FCCI shield to Chief Commissioner Regional Tax Office Chaudhary Muhammad Tariq.
FCCI Standing Committee Chairman Chaudhary Tallat Mehmood also presented a memento to President District Bar Association Malik Muhammad Amjad.
FAISALABAD. Acting President Faisalabad Chamber of Commerce & Industry Sheikh Farooq Yousaf is presenting FCCI shield to Chief Commissioner Regional Tax Office Chaudhary Muhammad Tariq during a seminar on Amnesty Scheme.