Central Board of Revenue Chairman, Abdullah Yousuf told the business community that the taxation system is moving away from assessment to self-assessment and reforms process initiated two years back is being reinforced by induction of technology through World Bank assistance. Addressing members of the Islamabad Chamber of Commerce and Industry on Friday, he emphasised that the reforms seek to end "manipulation or exploitation" (for personal gains) by either side"(taxpayer or collector).
Present on the occasion were ICCI President, Tariq Sadiq, Members of CBR, office bearers of the Chamber and representatives of business community.
Abdullah Yousuf said the mindset in CBR has changed .The reforms have given a 180-degree shift to the CBR, which is primarily a policy making and implementation machinery.
The CBR, he pointed out, is moving away from assessment system to self-assessment system, which is prevailing in all modern societies and has been a great success too.
Since, the tax reforms are in a transitory phase, there might be hiccups or roadblocks but the government is fully committed to see through the change, the CBR chief said and called for joint efforts by the government and the private sector to make it a success. He added that the reforms are here to stay and hoped that he would succeed in executing the reforms.
Another challenge, he told the office bearers of ICCI, is enforcement of sales tax, which he stressed, is the tax of the future, adding that like income tax, we are nowhere near the potential in the case of sales tax too. "Its present application is very limited."
Abdullah Yousuf said that though it is claimed that there are 1.5 million income tax payers. This is a very small percentage of country's population of 150 million. But in reality, only 1.1 million income tax returns were filed last year, far below the actual potential. Obviously, he added, there is glaring inequity in the system.
In the case of sales tax too, the CBR chief said, there are now only 88,000 registered persons or firms, as a large number of retailers with annual turnover of less than Rs five million were not registered.
But, he added, the CBR is being organised, and "Effort is to have foolproof data bank providing true figures of economic activity." Instead of adhocism, which prevailed earlier, the CBR would have full and accurate information. Technology, he pointed out, is going to be our saviour. The World Bank and Government of Pakistan are investing in modernising the system.
Speaking about the major issues of sales tax like audit, refunds etc, the CBR chairman said that audit is part of the new system. They want to have intelligent audit. "The system is being reviewed in consultation with the business community."
In regard to customs, the CBR chairman said the clearance system would see a total revolution. In this respect, he added, a pilot project is in operation in Karachi which avoids manual assessment. An electronic set of document works out the duty as soon as the shipment arrives and the system is to be replicated in other ports of entry within 18 months, Abdullah Yousuf said.
Speaking about three major problems ie smuggling, under-invoicing and misdeclaration, he admitted that administrative measures failed to curb smuggling, rather the menace increased. While administrative measures were important, the government adopted fiscal measures too by reducing the tariff to make smuggling unattractive. There was a positive change as tariff reductions were announced in the budget last year. The CBR chief disclosed that the coming budget too would include bulk of items.
This fiscal measure, he added, would also curb the menace of under-invoicing. It is proposed to rationalise tariff of several items in the budget. "This would also take care of misdeclarations."
Abdullah Yousuf said the macro-economic fundamentals are pretty high and growth rate has risen to 6.7 percent as compared to 6.4 percent last year. He said that high investment is only possible if we encourage and facilitate the investors and taxpayers, adding that government should provide maximum facilities to the investors.
The CBR chairman said that Malaysia is role model for us and added that Malaysia has achieved the goal of progress and prosperity due to its vision, continued and consistent policies. He said that we could be prosperous and economically sound by following their example and added that we are trying to adopt the concept of 'Malaysia incorporated.
He urged the private sector to play their role, adding that their active participation could lead us to progress and prosperity.
In his welcome address, ICCI President Tariq Sadiq informed the CBR chairman about the problems being faced by the traders' community. He referred to the visit of the former Prime Minister of Malaysia who said that they believed in the concept of 'Malaysia Incorporated' whereby the private sector was allowed freedom to flourish and prosper.
Comments
Comments are closed.