ISLAMABAD - While announcing to start crackdown against tax evaders, Federal Minister for Finance and Revenue Shaukat Tarin on Thursday said that he was ready to talk with the opposition on the Charter of Economy.
He said that government would arrest the tax defaulters who do not pay taxes despite having powers to pay. The government would arrest the tax evaders only after the approval of the finance minister and chairman Federal Board of Revenue (FBR). Powers to arrest were withdrawn from the FBR Assistant Commissioner, finance minister said in National Assembly Standing Committee on Finance and Revenue.
Shukat Tarin said that government is having details of 7.2 million potential taxpayers. “We will issue notices on the basis of this data”. The FBR would not conduct the audit of taxpayers, as it would be done through third party. He said that there was no possibility of any change in the FBR team till June 2022. He said tax evaders will be issued notices through third parties, adding that the waiver will be reinstated in case it affected the investment.
Talking about International Monetary Fund (IMF), Finance Minister said that negotiations are underway. He said that government had rejected the IMF’s demand of increasing power tariff and putting additional burden on the existing taxpayers. The IMF had asked to increase the power tariff by Rs4.95 per unit, which is unacceptable for us. The government, Tarin said, would control the circular debt through an alternate plan by reducing line losses and capacity payment. “We have told them that flow of circular debt will be controlled through increase in revenue under the alternate plan,” he maintained. He said that next round of talks with the Fund would be held in September this year.
Finance minister informed the parliamentary committee that government has recently generated $2.5 billion by issuing Eurobonds in international market. The government has planned to issue Sukuk bonds, Green bonds and Panda bonds. He said that the federation is bearing expenses of the security, health and deployment of Rangers in the provinces. He said the government plans to provide Rs100 billion loan for SMEs in the next budget, adding that the sales tax on milk has been abolished while duty on import of plant machinery will be reduced.
Shaukat Tarin said that he was ready to talk with the opposition on the Charter of Economy and the procedures for opening bank accounts for profit organizations will be worked out. 50 chartered accountants have been demanded from the Institute of Chartered Accountants of Pakistan (ICAP). The meeting of the National Assembly Standing Committee on Finance and Revenue was held yesterday at Parliament House, Islamabad, under the chairmanship of Faiz Ullah, MNA. Finance minister briefed the Committee about the dialogues with International Monitoring Fund (IMF). The Committee appreciated the briefing however, indicated some anomalies concerning the budget 2021-22 and suggested the minister to address the same. The minister assured the Committee to remove all the anomalies.
The Committee directed FBR to remove the definition of online market place Section 2 (18-A), the deemed retailer clause within the tier -1 retailer condition section (43-AF) and the chargeability of sales tax proposal on online market places under section (3-3C) considered. The Committee directed FBR to remove the proposed withholding tax on un-registered sellers selling on online market places in addition to the Committee observed that the FBR work with online market places to increase the documentation of un-registered market place sellers. The Committee further recommended that this may be reconsidered in future.
The Committee directed Ministry of Commerce and National Tariff Commission (NTC) to discus and take all possible measures to remove anomalies in duty structure of tariff concerning Pakistan Custom Tariff (PCT) Codes 4411.9200, 4411.9310, 4411.9390 and 4411.9400) being intermediary in nature as presented by the stakeholders and recommend that same may be substituted to 11% so that level playing field in the business is provided to all the stakeholders.
The Committee directed Chairman and Member (IR-Policy), FBR, to have a meeting today i.e 24th June, 2021, with the stakeholders from ginning sector and agriculture sector regarding tax imposition on agriculture implements and the representatives of online market place.