ISLAMABAD: International tax expert Dr Ikramul Haq has said that the tax amnesty scheme for the developers and builders does not have clarity as far as the general public is concerned, and the Federal Board of Revenue (FBR) shall disclose the names of individuals, companies and firms who have invested Rs 186 billion in construction projects under the said scheme.
Speaking as a guest in "Paisa Bolta Hai" with Anjum Ibrahim on AAJ News, here on Sunday, Dr Haq stated that the intent of the scheme envisaged by the prime minister was very good.
But, there are serious concerns about not disclosing the names of the investors availing the tax amnesty scheme at the time of registration with the FBR.
The FBR should have alphabetically disclosed the names in a transparent manner.
The scheme for the developers and builders is so complicated that even the developers and builders are unable to understand the whole scheme of the law. There are lacunas in the implementation of the scheme.
He said that the Article 19A (right to information) of the Constitution clearly says that every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law.
Even the Supreme Court of Pakistan has said that no court or legislator can restrict this fundamental right of the citizens of Pakistan till the constitution is amended.
In light of Article 19A (right to information) of the Constitution, citizens have the powers to seek information about the investors benefiting from the construction package, the senior tax lawyer stated.
The FBR is regularly publishing the Tax Directory, and disclosing names, NTNs and tax payments of the citizens of the country.
The FBR should not have objected to sharing the names of individuals, firms, and companies, who have obtained approval of Rs186 billion of investment in 158 construction projects.
The public should know at the first stage about the names and the past records of these big investors to do their homework before buying any property.
The people would ultimately find out the name of the developers and the builders who are doing these construction projects, he said.
Dr Haq stated that the FBR had issued a special provision (Section 100D) for the developers and builders under the Income Tax Ordinance, 2001, and linked it with the self-contained Eleventh schedule of the Ordinance 2001.
The reading of both Section 100D with the Eleventh Schedule, reveal that there is no condition to keep the names of the investors confidential.
In the past schemes, there was a specific clause of confidentiality.
He stated that the investor would get himself registered with the FBR portal, and as soon the amount was shown in his bank account, he would be made part of the Active Taxpayers List (ATL) of the FBR.
The international tax expert stated that the extension in the amnesty scheme for the construction sector was justifiable in view of the second wave of the Covid-19.
He said that under the existing amnesty scheme for developers and builders the government had not contributed anything in the form of money.
Under the past asset-whitening and amnesties schemes of 2018 and 2019, it was specified that if you are a public office holder, you and your spouse and dependent children are not entitled to avail the scheme.
However, it was allowed that the public office holder and politically-exposed persons Could avail the schemes if they the period of 10 years had expired. In other words in their case criminal offences were decriminalized whereas the National Accountability Bureau Ordinance, 1999 was made effective from 1985 and Supreme Court validated its retrospectively when challenged under the Constitution that prohibits punishment under a law retrospectively, Dr Ikramul Haq explained.
The Financial Action Task Force objected that how any country could allow decriminalization the state-level corruption done by state functionaries and politically-exposed persons after 10 years.
He reminded that Pakistan was also a signatory to the international treaties against corruption and other financial crimes. These actions are in conflict with such international obligations by allowing such investments without probing the source of the same.
The international tax expert stated that we should appreciate Prime Minister Imran Khan's initiative of Naya Pakistan Housing and Development Authority (NAPHDA) for construction of low-cost housing schemes for the poor segments of the society.
The initiative by the Prime Minister is praiseworthy, but the legal drafting of the schemes is poor and vulnerable to abuse. There are many lacunae that can be abused due to the poor drafting by the bureaucracy and implementation issues, like poor monitoring and collusive arrangement, he said.
There is a demand of three million homes for low-income groups every year, whereas, the backlog has increased to 12 million homes, he said.
The banks have promised to allocate Rs378 billion for construction of low-cost housing activities till December 2021.
The subsidy for interest payment is capped at five percent for low-cost five marla houses, and seven percent for 10 marla houses for the next five years.
The government has decided to provide Rs30 billion subsidy on low-cost houses. However, the main problem in subsidies that could not anticipate the rise in the prices of houses, the government is increasing prices and high taxes are leading to cost-push inflation in regard to petroleum prices, gas and electricity etc, international tax expert added.
Copyright Business Recorder, 2021
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