ISLAMABAD: A report of the Directorate General of Internal Audit Inland Revenue has shown an interesting fact that wealth tax was abolished in 2002-03, but the Federal Board of Revenue (FBR) is still in the process of recovering wealth tax pertaining to cases framed earlier.
According to the report of the DG Internal Audit Inland Revenue 2009-2010, the detection of loss of revenue for non- short-levy of additional wealth tax during the year 2009-10 amounting to Rs 1.078 (M) has been made by Northern Region only. Since the Wealth Tax Act, 1963 is not in operation, this area of the loss of revenue detected relates to the detection in respect of valuation dates before June 30, 2001.
When contacted, a tax expert said that cases of non-levy or short-levy of wealth tax are related to the past year when wealth tax was in operation. However, the amount of detection of wealth is negligible in the given past cases. The recovery of wealth tax in 2009-2010 shows that the Board is still in the process of recovering such tax framed before the period of June 30, 2001.
There might be instances where the wealth tax cases of past years were pending in courts and recoveries are now being allowed to the tax department. These cases are related to the loss of revenue on account of non-levy of short-levy of additional taxes under section 31B, 31BB of the Wealth Tax Act of 1963.
Another tax expert argued that any move on the re-imposition of wealth tax would only result in double taxation, which is against the basic principles of the income tax law. Generally, tax is being paid on the income earned by a person. The savings of that person is his wealth, which could not be again taxed by the department. An income converted into savings could not be taxed again and again. In the best tax administrations of the world, such type of double taxation is avoided.
Comments
Comments are closed.