The government has offered a tax incentive package to unregistered traders for voluntarily filing income tax returns ie, payment of minimum tax along with returns, a three-year exemption from audit and assets declarations under the self-assessment scheme to be accepted. This was stated by President Federation of Pakistan Chamber of Commerce & Industries (FPCCI) Mian Iddress at a joint press conference along with Senior Member Inland Revenue (IR) Policy Shahid Hussain Asad here at FBR's headquarters on Friday.
Mian Muhammad Adrees along with other representatives of traders and chambers said that the government has prepared a tax incentive package for traders who would be filing their income tax returns for the first time. The government has offered business community exemption from audit for three years if they pay a minimum fixed amount and declare their assets along with their returns. A proposed tax incentive scheme exactly on pattern of another amnesty scheme for non-filer traders is under consideration. If the agreement is struck with the traders, the government would promulgate a presidential ordinance to give it a legal cover after withdrawal of SRO powers from the FBR.
Once things are finalised, the government will promulgate an Ordinance to implement tax incentives to traders. The new filers would be allowed to deposit a minimum tax within the range of Rs 15,000 or Rs 20,000 along with their filing of first income tax return. However, the figure of fixed amount of tax (benchmark) has yet to be finalised. The new filers would be exempted from audit for a period of three years. The FBR will also accept assets declarations under the self assessment scheme and no question would be asked on their declarations of new assets. The facility would also be available to the existing filers who intend to declare their assets. However, this does not mean that a shopkeeper would declare an asset worth one billion rupees. After filing of returns and tax payment for the first time, traders would have to deposit 25 percent higher tax in the next three consecutive years to avail audit exemption.
Adrees said that a delegation held a meeting with Finance Minister Ishaq Dar at Finance Ministry on Friday. According to Adrees, business community has conveyed their apprehensions to the Finance Minister. The Finance Minister has assured the traders community that the FBR will not harass traders who will voluntarily made declarations of their assets and income. It has also been assured that no question would be asked from the new filers of returns.
For non-filers it has been offered that if non-filers would file their returns with some amount of fixed tax, no audit would be conducted for the next three years. Traders, who would file their returns, would have to deposit 25 percent more tax for the next three years.
The President FPCCI stated that the stance of the Finance Minister on withholding tax is very much clear. Referring to Dar, Adrees said that if any trader will file return, withholding tax would not be deducted. If withholding tax of any filer has been deducted, the same would be refunded. In this regard, Finance Ministry has already taken up the matter with banks.
He added that they are in contact with different traders group across the country and trying to resolve their issues. Zubair Tufail of FPCCI said that the returns of the new filers would not be included in the computerised random ballot of the FBR for selection of cases for audit provided traders pay 25 percent increased tax in the next three years. He said that the Finance Minister has also directed to set up a special Cell at the FBR House to update Active Taxpayer List. To facilitate traders, the names of new filers would be updated on a daily basis on the Active Taxpayer List.
Zubair said that they are trying their level best to withdraw the shutter-down strike call of certain trade bodies. On the conclusion, FBR Senior Member Inland Revenue Policy Shahid Hussain Asad said the discussions of three committees, ie, Communication Committee, Income Tax Committee, and Sales Tax Committee, are going on to facilitate business community to become filers and resolve their issues of income and sales taxes. The FBR will submit a report to the government by August 13 on the issues settled between the FBR and business community. The genuine demands of the business community would be accepted and their issues would be resolved. The FBR will forward a report to the government for implementation of the measures through an Ordinance. The FBR is no more empowered to issue a statutory regulatory order (SRO). The next meeting of the committees would be held on Thursday, he added.
He said that there were complaints about ease of doing business. "Let me assure you that the FBR wants to facilitate business community," Senior FBR Member said. He said that Pakistan belongs to all of us and the country can achieve self sufficiency only by getting rid of getting loans of Rs 1000 to Rs 2000 billion per annum. There is a need to get contribution from all of us.
According to a notification issued by the FBR here on Friday, in pursuance of agreement between business community and FBR the First meeting of Income Tax Committee was held in Conference Room of FBR (HQs) on 3 1.7.2015 chaired by Shahid Hussain Asad, Senior Member-IR-Policy, FBR. All members of the committee attended the meeting.
The agenda of the meeting was to facilitate business community members to become filers and thus avoid imposition of Withholding Tax under section 236P of Income Tax Ordinance, 2001, as well as to resolve related issues pertaining to Income Tax and to evolve an effective communication strategy on educating the public and specifically traders on the rational of this tax measure for documentation of economy and broadening of tax base. After a detailed discussion, it was decided to re-form "Income Tax Committee" as under: Malik Pervez, MNA (Convener); Shahid Hussain Asad, Senior Member (Inland Revenue Policy), FBR; Muhammad Idrees, President FPCCI; Sheikh Muhammad Asif, Lahore Chamber of Commerce & Industry; Muhammad Ali Mian, Former President LCCI; Zubair Tufail, FPCCI, General Secretary, United Business Group; Anjum Mahmood Butt, Pakistan Muslim Traders Wing; Muzammal Hussain Sabri, President Islamabad Chamber of Commerce & Industry; Malik Sohail Hussain, FPCCI, Islamabad; Khawaja Zarrar Kaleem, VP, FPCCI, Lahore; Khawaja Tanveer Ashraf, PML-N Gujranwala; Asim Zulfiqar, Chartered Accountant, Lahore; Kashif Shabbir, Former President RCCI; Iftikhar Ahmed Vohra, President KCCI, Karachi; Shahid Ghafoor Paracha, Vice President Anjuman-e-Tajran; Haroon Farooqi, ECKO Group Karachi/former President KCCI; Abid Subhan, C.A., Karachi; Sh. Irfan Iqbal, Al-Falah; Muhammad Hashim, Pipe Industries; Sh. Nadeem Anwar, AN Industries (Pvt) Ltd and Waqas Khalid, Khalid Pipe Mils (Pvt) Ltd. The above Committee will have the powers to co-opt other members, if necessary. Income Tax Committees shall submit their reports by 13th of August, 2015, FBR added.
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