The Federal Board of Revenue (FBR) has shown willingness to discuss idea of fix tax scheme for traders and businessmen operating in commercial markets to improve documentation of the economy and add to revenue collection from trader's community.
Responding to the proposal of Senator Illyas Ahmed Bilour to fix tax for each shop at the Senate Standing Committee on Finance here on Wednesday, Federal Board of Revenue (FBR) Senior Member (Inland Revenue) Policy Shahid Hussain Asad replied that the government can discuss the fix tax scheme on each shop with the business community to make it a viable option.
Chairman of the committee Illyas Bilour stated that the fix tax scheme on traders is an effective tool for documentation of economy as well as improvement in revenue collection. For example, fix tax rate of Rs 1 lakh per shop would be a viable option and traders would be willing to pay the levy. The FBR can discuss the proposal of fix tax scheme with the business and trade.
FBR Senior Member (Inland Revenue) Policy was of the view that it is an attractive proposal to fix tax of Rs 1 lakh per shop and the government can discuss the same with the business community. Chairman of the committee suggested that the pay packages of the FBR employees in the field formations should be doubled. The functioning of FBR's field formations needs to be improved or pay raise be given to field employees.
When asked about major persons affected due to the withholding tax on non-filers, FBR Senior Member (Inland Revenue) Policy stated that the banking transactions of the traders and real estate businesses can be checked through withholding tax imposed on non-filers. Major concealment has been witnessed in declarations of buying and selling of properties. The District Rates (DC) rates of immovable properties are low as compared to the actual market values of properties. The DC rates are fixed by the provincial governments and being part of the government, the FBR cannot challenge the property declared on the values of DC rates. However, if we have ample evidence that a property worth Rs 2.5 crore has been declared at Rs 50 lakh value, the same can be checked through banking transaction. In the presence of irrefutable evidence, the FBR can challenge the DC rates. For example, the intelligence agency of the FBR found that a house in DHA Rawalpindi was declared at a value of Rs 50 lakh, but the property dealer received the amount of Rs 2.5 crore through banking instrument. In such kinds of cases, the FBR can frame cases of tax evasion or mis-declarations against the buyer or seller of properties. The FBR can prove in the court that the immovable property has been under-valued taking into account such irrefutable evidence.
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