RRMC recommendation: Section 7E of IT Ord should be equally applicable to non-filers

ISLAMABAD: The Reforms and Resource Mobilization Commission Saturday recommended the government to bring clarity in the income tax law that the section 7E (tax on deemed income) of the Income Tax Ordinance, 2001 should be equally applicable on the non-filers of the income tax returns.

Federal Minister for Finance and Revenue Senator Ishaq Dar chaired the meeting of Reforms and Resource Mobilization Commission (RRMC) at Finance Division on Saturday.

The commission has recommended that the FBR must bring clearly in the income tax rules that the same law is equally applicable on the non-filers under section 7E of the Income Tax Ordinance, 2001.

Presently, the section 7E (tax on deemed income) of the Income Tax Ordinance, 2001 should be specified in the income tax returns to be filed by the filers. The tax deposited is reflected in the income tax return.

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At the same time, the law is also applicable on the non-filers. Therefore, there is a need to bring clarity in the law about the applicability of the section 7E of the Income Tax Ordinance, 2001 on the non-filers of the income tax returns.

During the meeting, Finance Minister Ishaq Dar has directed the Federal Board of Revenue (FBR) to analyze the income tax and sales tax budgetary measures for fiscal year (2023-24) and tax reforms proposed by the Reforms and Resource Mobilization Commission (RRMC).

Sources told Business Recorder the FBR has been given the task to go through the proposed taxation measures and tax reform initiatives along with the RRMC. The proposed taxation measures of the RRMC and best international practices in foreign tax jurisdictions would be analyzed at the level of the FBR.

“Finance Minister has directed the FBR to have an in-house analysis of the RRMC report. The presentation of the RRMC to Dar is based on the current economic situation and measures to expand the tax base and generate additional revenue in coming budget (2023-24)” sources said.

A meeting of the Reforms and Resource Mobilization Commission (RRMC) on Saturday deliberated upon the suggestions being put forward by the Commission and agreed to come up with business friendly tax reforms after interacting all the stakeholders.

The meeting chaired by Finance Minister Ishaq Dar was attended by the Ashfaq Yousuf Tola Chairman RRMC, Tariq Bajwa SAPM on Finance, Tariq Mehmood Pasha SAPM on Revenue, Secretary Finance, Chairman Federal Board of Revenue (FBR) and officials of the Finance Division, the FBR, and the RRMC.

Dar welcomed the members of the Commission and highlighted the current economic and financial outlook of the country. He shared that in spite of challenges, the government is determined to set the economy on a positive trajectory through introducing reforms in various sectors in order to achieve economic stability and growth.

The Chairman of the Commission presented an interim report containing recommendations of the Commission to the Finance Minister. Dar acknowledged the efforts of the RRMC in recognizing issues and challenges in the exiting taxation system and for devising valuable suggestions for reforms in the revenue policies for resource mobilization, ease of doing business, and tax payer facilitation to achieve sustainable economic growth.

The meeting deliberated on the suggestions being put forward by the Commission and agreed to come up with business-friendly tax reforms after interacting all the stakeholders. The Finance Minister extended his support to the Commission to ensure fast-track implementation of the reforms.

The Chairman of RRMC thanked the Finance Minister for taking keen interest in the process and for his kind of support for comprehensive reforms.

Copyright Business Recorder, 2023