POS, electricity consumption by public: Law hasn’t stipulated any tax: FBR

Islamabad: The Tax Laws (Third Amendment) Ordinance 2021 has not imposed any tax on point of sale (POS) and electricity consumption by the general public, as only professionals would be required to pay additional advance tax under the new law.

This was stated by newly-appointed FBR spokesperson Asad Tahir Jappa during an introductory meeting with the media, here at the FBR Headquarters on Tuesday.

Maximising the revenue potential was the core objective of the FBR’s use of technology for determining the real income of the citizens through digitisation, data sharing and automation, he stated.

He clarified that under the Tax Laws (Third Amendment) Ordinance 2021, the government had imposed additional advance tax on the rates ranging from five percent to 35 percent on professionals using domestic electricity connections.

The professionals covered accountants, lawyers, doctors, dentists, health professionals, engineers, architects, IT professionals, tutors, trainers, and other persons engaged in the provision of services.

When asked about filing of income tax returns, he said the so far 0.75 million income tax returns had been received till September 21 and the FBR is not considering any proposal to extend date in filing of income tax returns.

He advised the taxpayers to timely file their income tax returns by September 30, 2021 to avoid penal action under the law.

When asked about the target of four million returns this year, he responded that the FBR has set a target of 3.5 million income returns for the current tax year.

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To a question on traders’ strike call against the Tax Laws (Third Amendment) Ordinance 2021, he regretted that the traders’ community were earning huge profits but not ready to deposit their due share in the national kitty.

This attitude of the traders’ community is unjustified and they must be registered and pay the taxes under the law. The FBR spokesperson stated the FBR was the top revenue collection agency of the country, but the public did not give it the due respect and protocol.

He quoted that three dozen officers were killed due to the Covid-19.

Under the ongoing campaign of return filing, the FBR has approached 30 influential people for creating awareness among the general public.

The messages by our opinion leaders/national heroes would plead the cases for building momentum of the ongoing campaign for filing of income tax returns.

To a question on POS, he stated that no new tax had been imposed on the POS retailers.

However, there is an increase in amount of penalty for tier-1 retailers, who are not integrated with the Board’s computerised system.

Quoting data of tax-to-GDP ratio available on the OECD website, Asad Tahir Jappa stated that the tax-to-GDP ratio needed to be improved.

France tax-to-GDP ratio stood 44.78 percent; Denmark over 44 percent and UK tax-to-GDP stood at 33 percent.

Even the African countries have average tax-to-GDP ratio of 16.5 percent.

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Within South Asia, he stated that Nepal was the leader in the region with tax-to-GDP of 19.4 percent; Bhutan over 16 percent; India and Sri Lanka over 12 percent; Bangladesh nine percent and Afghanistan has the lowest tax-to-GDP ratio in the region.

He added that the FBR was making serious efforts to raise its tax-to-GDP ratio from the current level.

He claimed that the FBR’s tax-to-GDP ratio was 10.5 percent.

Tax-to-GDP ratio should be the benchmark for ascertaining the tax payments made by the certain segment of the business community, who are not ready to pay their due shares of taxes in the national kitty.

He added that during the last address of Finance Minister Shaukat Tarin to senior officers at the FBR Headquarters, the finance minister shared his future vision and plans on digitisation, automation, use of artificial technology, and data sharing.

Copyright Business Recorder, 2021