KARACHI - Rehmatullah Khan Wazir, Chief Commissioner of the Large Taxpayers Unit Karachi, has said that several measures have been taken in the budget for broadening the tax base. “The concept of filer and non-filer has been introduced to broaden the tax base and given incentives to the compliant taxpayers.”
He was speaking at the post budget seminar organised by Karachi Tax Bar Association to discuss & deliberate on the possible consequences of the federal budget 2014-15 at a local hotel in Karachi.
He said rise in inflation and projected development expenditure will help the revenue body to achieve the collection target in the next fiscal year.
The revenue for the outgoing fiscal year will be near to revised collection target of Rs2,275 billion, he added.
Wazir said that in the past several attempts were made to broaden the tax base, including conducting surveys, exemption from audit and amnesty schemes. “But all such exercises could not yield desired results,” he said. The applicability of active taxpayers-related provisions will be difficult. However, the same should be adopted on the filers of last tax year, he said.
The LTU Karachi chief commissioner said that changes regarding retailers will force them for mandatory registration.
Commenting on the single-digit sales tax, he said, a commission has been constituted, which will give recommendations in the next three to four months.
He; however, suggested that the provinces should bring down their sales tax on services to a single-digit because in a scenario when the federal government brings down the sales tax to a single-digit, there would be no input adjustment and refund. “This may create problems for the taxpayers,” he said.
Masoud Naqvi, country senior partner of KPMG Taseer Hadi and Co, said that the latest budget is the continuation of the last year’s programme of the government.
He lauded the government for achievements made in the outgoing fiscal year, especially attaining the economic growth of 4.1 percent from 3.7 percent, as well as an increment in the per capita income to $1,386 from $1,339. He said that curtailing budget deficit at 5.8 percent from the previous year’s 8.2 percent was a big achievement. However, he said that it would depend on the provincial budgets where the federal government has estimated Rs220 billion.
Naqvi highlighted certain challenges to be faced by the government in the days to come, including poor law and order situation and terrorism where $102 billion losses had already incurred to the economy during 2001 to 2014.
Abdul Qadir Memon, former president of the Pakistan Tax Bar Association, highlighted the changes brought in the direct taxes through the Finance Bill, 2014.
Memon said that through these changes the share of direct taxes would increase from 36.5 percent to 37.5 percent. Besides, Rs100 billion exemptions have been withdrawn and the budget incentivised export and textile sectors, he added.
Adnan Mufti, FCA at Shekha and Mufti Chartered Accountants, “Reality will unfold slowly and gradually,” adding that there is an unclear tax policy of the government. Syed Wasimuddin Hashmi, president of KTBA, welcomed the speakers for deliberating on the key issues pertaining to the budget. He also appreciated the guests for highlighting anomalies in the Finance Bill 2014.