LAHORE - Unregistered traders are to be offered an official tax amnesty if they declare their assets, business leaders said Friday.
Under the scheme, full tax liability on up to Rs50 million earnings will be waived in favour of a one per cent payment. They will also be exempted from auditing their businesses for three years.
Prime Minister Nawaz Sharif is expected to announce the concession in Islamabad later this month as part of the government’s plan to bring more businesses into the tax net.
All Pakistan Anjuman-e-Tajiran general secretary Naeem Mir told The Nation the government and business community had finalized a new tax incentive package for non-filers and the Prime Minister will formally announce it at Islamabad’s Convention Centre. “We have developed a consensus to resolve the tax issues as most of our 18-point charter of demands has been accepted,” he said.
More than 50 million wholesalers and retailers could benefit from the scheme. The sales tax act 1999 will be amended and all Sales Taxes deducted at manufacturing and import level.
Traders will also be exempted from value added tax which will only be paid by manufacturers and importers. The Income Tax Ordinance 2001 will be amended and slab systems will be abolished in favour of a new simpler tax system.
Under the amnesty, newly registered filers will only pay a one per cent turnover tax for the first three years. In subsequent years the tax will increase annually by 0.25 per cent and a new sector by sector slab system introduced. The cash withdrawal limit will also be increased to Rs.100,000 without any withholding tax.
The APAT leader said the purpose of the new package is to encourage non-filers to file their returns under a simple procedure.
Other organizations which had opposed the negotiations were not serious about resolving traders’ issues, he said.
“We are fighting for those traders who, as responsible citizens, wish to pay tax but remained out of tax net due to system failure. Our 18-point agenda’s major points have been accepted to resolve traders’ issues,” he added.