ISLAMABAD - The National Assembly Standing Committee on Finance on Thursday approved tax amnesty scheme for traders to whiten the black money up to Rs50 million by paying a nominal 1 per cent tax.
The committee approved the Income Tax (Amendment) Bill, 2016 due to the numerical strength of the government’s members in the committee. Four members voted in favour of the bill while three members each from PPP, PTI and MQM opposed it.
The government is likely to table the Bill in the National Assembly for final approval today (Friday). The government has estimated to generate Rs125 billion through Income Tax (Amendment) Bill, 2016 by bringing 500,000 non-taxpayers into tax net.
The opposition parties expressed reservations on the Bill. They said that previously announced seven amnesty schemes from 1958 to 2008 had not expanded the tax net.
Committee member Abdul Rashid Godil of MQM said that tax amnesty scheme is injustice with the existing taxpayers. “Why the government is giving this package to the traders only. Other sectors should also be given opportunity to take benefits from it,” he said.
Another committee member Dr Nafisa Shah of PPP gave dissent note on the bill. She termed the aforesaid bill as violation of the constitution as article 25A stipulates that all citizens are equal before the law, while the bill is only trader-specific. “We are not against traders. But one chance should be given to whole society to take benefit from amnesty scheme,” she said and added that opportunity should be equally available to all sectors including manufacturing, services sectors, and professionals like lawyers, teachers, doctors.
Committee member Asad Umar also wrote dissent note on Income Tax (Amendment) Bill, 2016. In his note, Umar said amnesty scheme is unfair for the taxpayers who pay their taxes honestly. “Without FBR reforms the fundamental reasons why this scheme is being proposed will not change and we will face the same situation in a couple of years,” he said.
He further said the scheme would send the wrong signal to the nation that the government is so weak that it cannot enforce laws and it is forced to give amnesties.
Abdul Manan, MNA of ruling PML-N, asked the committee members to pass the bill, as around 0.6 to 0.7 million people have not filed their income tax returns as they are waiting for approval of Income Tax (Amendment) Bill, 2016. “This scheme is not ideal one as it has many flaws,” admitted committee chairman Qaiser Ahmed Sheikh. He said that committee should pass the bill in a bid to broaden the tax base of the country.
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. For non-filers of income tax returns, the government has agreed to allow the whitening of assets up to Rs50 million. Traders availing the scheme will be exempted from audit for three years, as they would not be asked about sources of income. The non-filing traders in 2016 will have to declare three times more turnover than the one declared for availing of the scheme.
In case the turnover does not exceeds Rs50 million, the traders will pay 0.2% tax and when the turnover is more than Rs50 million but less than Rs250 million, they will pay Rs100, 000 plus 0.15% of the excess amount. If the turnover exceeds Rs250 million, the traders will pay Rs400,000 plus 0.1%.
The income tax filers could also avail from the amnesty scheme. Traders who file income tax returns will be allowed to revise previously filed returns in order to declare the hidden income. They are required to pay a 10% higher tax than the tax paid according to the original return. In case of hidden untaxed income, the filers will declare the income by paying 1% income tax.