Lahore - The Benami Transaction Prohibition Law is being introduced before the upcoming federal budget to improve tax net in the country.
This was stated by Special Assistant to Prime Minister on Revenue Senator Haroon Akhtar Khan while addressing a seminar organized by Pakistan Tax Bar Association, Lahore Tax Bar Association in collaboration with All Pakistan Anjuman-e-Tajiran to discuss and remove apprehensions on Voluntary Tax Compliance Scheme at FBR regional tax office.
The minister hoped that the scheme would have a positive impact as 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 one percent tax for the tax year 2015.
“It is historic moment that all tax bars, traders and Federal Board of Revenue are on the same page to join the efforts of the government to enhance tax to GDP ratio which is lowest in the region as only half percent of the total 180 million population is filer in the country.”
The seminar was also addressed by the PTBA president Mohsin Nadim, LTBA president Mansha Sukhera, APAT central general secretary Naeem Mir, FBR member IR Policy Rehmatullah Wazir, Member Admin Dr Irshad and LTBA general secretary Ch Qamruz zaman.
Overall the meeting was a great success in terms of building confidence among the traders over the newly launched VTCS as well as for attracting the traders to benefit from the said scheme. All sects agreed to work jointly for success of this scheme and the representatives of trade bodies took on to themselves to guide and educate the members of their respective bodies for availing the scheme.
Federal minister of state said that 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.
However, he warned that after the lapse of scheme, the non-filers will not only have to pay 0.6 percent WHT but also 35 penalties for not paying tax.
Some countries have also announced similar amnesty schemes for increasing tax revenues, he said, adding that considering the low tax revenue collection, it was a good measure to discourage unhealthy trends like money laundering and sending money through Havala.
He said that FBR’s field formations across Pakistan is facilitating and educating the traders about the Voluntary Tax Compliance Scheme which has been launched after approval of the Parliament.
In the scheme we have accepted all demands of the traders remaining in the system and law. “I appreciate the traders and their leadership including general secretary Naeem Mir, president Ajmal Baloch and chairman Kh Shafiq for cooperating with the govt to enhance tax net.”
All Pakistan Anjuman-e-Tajiran’s (APAT) Central General Secretary Naeem Mir said that all points of the tax amnesty scheme were finalised with the approval of traders.
He said that the amnesty scheme is a move to broaden tax base and not whitening of black money, Mir said, adding that for the first time in the history, government has given incentives to traders of small and medium categories.
He said that the scheme is the best package for small traders and “we will go forward with this plan of improving tax to GDP ratio in the country.”
“APAT has attempted to bring additional one million new taxpayers in tax net in the next three years and who is trying to politicise the issue is actually sabotaging the move of tax collection,” he said.
Naeem Mir said that as many as 3.5 million traders across the country would get benefit and would enter into the system, which would ultimately help economic development of the country.
He said currently about 100,000 traders were paying their taxes and this package would help hundreds of thousands more traders to enter into tax net. A new one-page tax return form has been introduced for the new taxpayers.
Addressing the seminar PTBA president Mohsin Nadim announced the full support of all tax bars to the amnesty scheme. He said that taxation system of the country was so outdated and complex that the traders remained away from entering into the system.
“Now the government has changed the team of Federal Board of Revenue (FBR) in a bid to correct the system and the traders are willing to enter into the tax net due to positive policies of the government,” he added.
Mohsin Nadim said that all tax bars support this scheme which was introduced in view of the prevailing culture of massive under-reporting. It was expedient to provide a one-time opportunity to the filers as well as non-filers to regularise their tax affairs by adopting a special and simplified procedure for assessment of their tax.
Member Inland Revenue Policy Rehmatullah Wazir, on this occasion, explained the salient features of the Voluntary Tax Compliance Scheme. He explained the benefits of becoming part of the scheme and urged traders to take full advantage of this opportunity to become part of the tax system and do their business with ease and comfort.