The government has estimated to generate Rs125 billion through Income Tax (Amendment) Bill, 2016 by bringing 500,000 non-taxpayers into tax net, said FBR’s member (Inland Revenue-Policy).
Rehmatullah Khan Wazir was briefing National Assembly Standing Committee on Finance on Tuesday. The government would generate a minimum of Rs46.5 billion from the proposed tax amnesty scheme, he added.
Briefing the National Assembly Standing Committee, Chairman FBR Nisar Khan dispelled the impression that recently announced scheme was an amnesty scheme. “This is not amnesty scheme as it is special procedure for the traders to bring them into tax net as introduced for the other sectors,” he said. The government wants to broaden tax base with the help of this initiative, he added.
He briefed the committee that seven tax amnesty schemes had been introduced in the country from 1958 to 2008. Sharing details of the schemes, he said that government generated Rs3.16 billion from amnesty scheme introduced in 2008, Rs10 billion in 2000, Rs141 million in 1997 and Rs270 million in amnesty scheme announced in 1976.
Committee member Murad Saeed of PTI showed serious reservations over the recently announced tax amnesty scheme by saying, “The government has introduced this scheme entirely on political basis to get benefit before general election due in 2018”. “How will the scheme help broaden the tax base when seven amnesty schemes from 1958 to 2008 had not expanded the tax net?” he asked from the government.
PPP’s MNA Dr Nafisa Shah also opposed the amnesty scheme. She asked why the scheme is traders specific only, saying opportunity should be equally available to all other sectors including manufacturing, services and other professionals like lawyers, teachers, doctors.
Another committee member Abdul Rashid Godil of MQM also criticized the government for announcing tax amnesty scheme for the traders only. He said that government should also give an opportunity to landlords and services sector to take benefit from the recently announced tax amnesty scheme. Secretary Finance Dr Waqar Masood said current scheme is not an amnesty scheme as government has given an opportunity to traders to become tax filers. “No one would be able whiten his property, assets and shops under the proposed scheme,” he claimed.
The committee decided to approve the ‘The Income Tax (Amendment) Bill, 2016’ on Thursday after considering recommendations of the Senate Standing Committee on Finance. The PML-N government on January 1 announced a tax amnesty scheme to whiten the black money up to Rs50 million by paying a nominal 1 percent tax.
Chairman FBR informed the members that government had initiated reforms in FBR, as it started eliminating concessionary regime and tax exemptions worth Rs220 billion had been withdrawn in last two years. Similarly, the FBR issued notices to 2,50,000 non-taxpayers and also introduced differential taxation system for filers and non-filers to broaden the tax base of the country.
Later, the National Assembly’s Standing Committee on Finance approved the Equity Participation Fund (Repeal) Bill, 2014 and the offences in respect of banks (Special Courts) amendment act, 2015.