Payment of promissory notes expected to start from next month: FBR

FAISALABAD, March 22 (APP)::Federal Board of Revenue (FBR) Chairman Muhammad Jahan Zaib Khan on Friday said that issuance and payment of promissory notes were expected to start from the next month.

Addressing a function at the Faisalabad Chamber of Commerce & Industry (FCCI) here, he said that earlier February 15 was given to issue the promissory notes but the State Bank of Pakistan and the finance ministry raised some issues which now had been resolved while it has also been approved in the Finance Supplementary (second amendment) Bill 2019 and hopefully the payments of refund claims through promissory notes will start from the next month.

He said that a fair system was being evolved under which the promissory notes will be issued to exporters who will opt for it. "Cash payment will also continue side by side," he assured and said that one third payment of total refund claim will be made in cash while remaining will be settled through promissory notes.

"Ten per cent markup will be allowed on these promissory notes which will be paid after three years," he said. However, these promissory notes will also be acceptable and valid trading instrument in the financial market, he added.

He said that every individual was responsible for paying taxes and system will take its own course when they will fail to fulfil their mandatory obligations.

Regarding 40-B, he said that the persons involved in under-reporting were on the FBR radar and could not conceal their actual tax liability.

He offered to declare Faisalabad '40-B free' if they agree to give certain revenue targets and in this connection, the FCCI will have to play its role as a guarantor.

Regarding distortion in the working of Provincial Revenue Authorities (PRA) and FBR, he said that particularly the sales tax laws were not fully harmonized. The National Finance Commission (NFC) has established a working ground which was reviewing different proposals to resolve this issue. He said the FCCI and other chambers should also present viable proposals to resolve the issue.

He said that although every province had different views yet the FBR was trying to evolve a mutually acceptable way to file a single return.

FBR Chairman Jahan Zaib Khan said that tax system had some inherent complications and:" We will have to sit together to resolve the same".

In this connection, a commissioner level female officer had been deputed at the FBR as a spokesperson, he said and added the business community through its relevant chambers could approach her to get their genuine problems resolved.

He said that the focal person would also help for the efficient follow-up of decisions taken during the meetings between the business community and the chairman FBR.

Jahan Zaib Khan said:" Traders are an integral part of economy and we must bring them into tax net to resolve our financial problems."

He said that a simple and easy tax system was being evolved for small traders which will be initially implemented in Islamabad.

Regarding trust deficit between tax payers and tax collectors, he said:" Through social evolution we will have to change our mindsets regarding language of tax notices." He added that it was designed during the colonial rule but he was ready to change it.

He said laws were being improved to facilitate the business community.

He also mentioned Finance Supplementary (second amendment) Bill 2019 and said that it was prepared by the FBR and hence no new tax was proposed in it rather we have facilitated the business community.

He said that revenue would automatically increase with positive growth in the businesses.

He mentioned the tax to GDP ratio and said that it was 11.4 per cent. With this poor ratio, we cannot meet our domestic expenditures. He added that ratio should be at least 20 per cent and the government was working on it.

Earlier, President Faisalabad Chamber of Commerce and Industry (FCCI) Syed Zia Alumdar Hussain presented welcome address and highlighted the problems being faced by traders and industrialists.

Later, the FCCI president presented chamber memento to FBR Chairman Jahan Zaib Khan.