9,020 returns filed, Rs 850 million deposited under VTCS: NA informed

As many as 9,020 returns have been filed under the Voluntary Tax Compliance Scheme (VTCS) and tax of Rs 850 million deposited, resulting in documentation of working capital of Rs 85 billion. Parliamentary Secretary for Finance, Revenue and Economic Affairs Rana Afzal Khan informed this to the National Assembly Friday during the question hour.
As per the estimates provided by the traders it was expected that a large number of traders will avail the scheme, he said, adding that before introduction of VTCS it was noted that around 61,000 traders were declaring taxable income exceeding Rs 400,000. In this background the response of 9,020 traders may not be termed as failure of the VTCS.
The secretary said the scheme was introduced at the request of representatives of trade bodies, business chambers and FPCCI in the wake of 0.6 percent withholding tax on bank transactions on non-filers under section 236P through the Finance Act, 2015, which was reduced to 0.3 percent up to 29th February, 2016 and to 0.4 percent effective from 1st March, 2016.
Rana Afzal also informed the house that since the objective of withholding tax was documentation and expanding the tax base, the federal government agreed to accept the demand of the traders after long drawn discussion that instead of paying withholding tax on banking transactions of non-filers, a scheme be introduced whereby non-filers would file their returns, and become filers and consequently withholding tax will not be applicable to them.
Unlike amnesty schemes, which had been introduced by the previous governments, the VTCS was introduced at the request of traders in the wake of withholding tax and the federal government has nothing to lose since withholding tax under section 236P would still be applicable to non-filers, the rate of which, at present is 0.4 percent, he said. Minister for Interior and Narcotics Control Nisar Ali Khan informed the house through a written reply that a total of 5,322 names of individuals have been deleted from Exit Control List since 01-5-2013 till date. He said that 28 individuals having dual nationality are on the ECL. There is no separate policy for dual nationals and the ECL Rules 2010/Policy is being followed for placement of names on ECL, he said.