ISLAMABAD - Terming the tax amnesty scheme financial NRO (National Reconciliation Ordinance), the Senate Standing Committee on Finance Revenue and Economic Affairs on Friday directed the Federal Board of Revenue (FBR) to make it a part of the finance bill and provide details at the next meeting.

The Senate Standing Committee on Finance, Revenue and Economic Affairs which met with its chairperson Senator Nasreen Jalil in the chair discussed the tax amnesty scheme, ‘The Tax Laws (Amendments) Bill 2012’. The committee members noted that the Parliament could not give blanket powers to the FBR to bring any scheme and directed it to make the tax amnesty scheme a part of the finance bill.

The committee also noted that they would not approve the present format of the bill and sought complete details at the next meeting likely to be held on January 4.

In his remarks, Senator Ishaq Dar said the committee should recommend the upper house to reject this law in its existing form as it would be challenged in the court of law after 48 hours of its approval from the parliament.

Earlier, Nasreen Jalil, in her remarks, said the tax amnesty scheme was like an NRO that would whiten the black money on the payment of certain amount of tax.

Federal Board of Revenue Chairman Ali Arshad Hakeem said the FBR could not empower its officials to take action against the already traced 2.9 million non-taxpayers as corruption level would double in the tax department. Terming the tax amnesty scheme a goldmine, he said the government would not only generate revenue through this scheme from 2.9 million non-taxpayers but also increase the country’s tax to GDP ratio by one per cent which was at present 9.1 per cent.

Briefing the Senate Standing Committee on Finance Revenue and Economic Affairs, the FBR chairman said the government would not generate any revenue if it started issuing notices to 2.9 million non-taxpayers, so the best option available was to give chance to non-taxpayers by announcing the tax amnesty scheme.

Ali Arshad Hakeem briefed the committee that top 0.2 million non-taxpayers of 2.9 million would not be able to benefit from this amnesty scheme as the FBR would deal with them regarding tax collections while the other 2.7 million non-taxpayers would have to pay Rs 40,000 if they wanted to declare the assets up to Rs five million in the first month of the scheme, Rs 50,000 in the second month and Rs 70,000 if they availed themselves of this scheme in the third month.

The FBR chairman admitted that the influential class of the society was already enjoying ‘financial NRO’ in the country as they got several tax exemptions. He said the FBR was working to eliminate the tax exemptions given to several sectors through SROs, adding a detailed report in this regard would be submitted to the finance minister on January 2. He revealed that 84 per cent of the tax exemptions had been given through SROs.

Arshad said other countries like the United States, Australia, South Africa, Spain, Texas and Mexico had also introduced tax amnesty schemes. Senator Haji Adeel said this would discourage honest taxpayers of the country. Senator Hamayun Khan Mandokhel also showed concern over the tax amnesty scheme and said the FBR had other options to broaden the tax base of the country.