LAHORE

The Federal Board of Revenue is considering to issue one pager Urdu tax return farm to 2.2 million electricity commercial connection holders through their power bills. The FBR will ask them to pay the nominal tax to come into tax net under Voluntary Tax Compliance Scheme (VTCS) before 1st of March.
This was stated by APAT central general secretary Naeem Mir while talking to The Nation. He stressed the need to improve the tax-to-GDP ratio to over come budgetary deficit and creating room for development expenditures.
“If we improve our tax-to-GDP ratio to that of India, there will be no fiscal deficit in the country,” he said. The tax-to-GDP ratio of India is about 14-15 percent in the last year while Pakistan still below double digit. He said that Karachi is the commercial hub of the country comprising major revenue spinner and lifeblood of Pakistan’s economy, which contributes around 70 percent to national exchequer.
Dwelling upon the newly introduced Voluntary Compliance Tax Scheme (VCTS), he said that FBR officials are also working to convince the traders to avail the scheme with the persuasive approach.
He highlighted the benefits underpinned this voluntary compliance approach, citing broadening of tax base and tapping the tax potential of ‘Parallel Economy’ as the favorable outcomes.
He implored upon the officers to redress the grievances of business community by according them a patient hearing.
He said that Voluntary Tax Compliance Scheme (VTCS) has offered a rare and golden opportunity to the traders to become part of the tax net and do their business with ease and comfort and without any fear of being audited for the next four years.
APAT General Secretary Naeem Mir said that the scheme would have a positive impact because it would encourage documentation of the informal economy by allowing non-filing traders to regularise their undeclared working capital up to Rs 50 million by paying a nominal tax, as the government has slashed income tax by 80-90%. Naeem Mir said that VTCS is the simplest and easiest scheme in the history of country to facilitate traders and if they don not benefit from this, their coming generation would suffer.
All tax bars are agreed that VTCS is a beneficial plan to enhance tax net in the country, he said, adding that tax advisers would now convince the traders to include in this scheme.
Naeem Mir said that traders who will join VTCS would be exempted from sales tax. These traders would not be made withholding agents and they would also be exempted from all kinds of audit from the last five years and the next four years. During this period, they would not be served any kind of notice under any section, he added.
“The VTCS beneficiaries would also be exempted from wealth statement. They would have to pay just 0.1-0.2% turnover tax and they would be included in active taxpayers list in 24 hours. Resultantly, WHT on there banking transactions would be removed automatically,” he added.