Business community urges FBR to widen tax net

Business community has demanded of the Federal Board of Revenue (FBR) to bring those 3.5 million people into the tax net who were registered with the department instead of penalising the existing taxpayers.
The number of taxpayers have decreased from 1.1 million in previous year to 0.9 million this year, mainly due to abuse of Section 38-B of the Sales Tax Act. The Lahore Chamber of Commerce and Industry (LCCI) acting president Muhammad Nasir Hameed Khan stated this while addressing the executive committee meeting also attended by former office bearers including LCCI presidents Mian Anjum Nisar and, Muhammad Ali Mian here Thursday.
The meeting participants said the Section 38-B of Sales Tax Act 1990 is being misused by the tax officials who are harassing the businessmen. The participants of the meeting were of the view that teams from tax department should visit the markets, if indispensable, but they should immediately stop harassing business community. If there is an urgent need for stock taking and ascertaining the Sales Tax liability of any particular business unit, the FBR officials should take association concerned or the Lahore Chamber on board.
The FBR should stop harassing the filers as non-filers and the ones outside the tax net are not accounted for at all which discourages businesses to come into the tax net. There are 3.5 million registered taxpayers out of which only around one million file their tax returns. Government should take necessary measures to ensure filing of returns by remaining 2.5 million individuals and businesses, they said.
They said that bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of commissioner in the light of reply submitted by the taxpayer. The recovery should be executed after the Tribunal's decision, they said.
They said that unfortunately when the FBR initiates a recovery case, the taxpayers are left defenceless as FBR itself is the complainant and judge at the same time. Instead of focusing on controlling under-invoicing, curbing smuggling and expanding the tax net, the FBR seems inclined to pressurise registered taxpayers who are already suffering due to high rate of sales tax, income tax and Custom duties by creating fictitious cases for recovery of outstanding dues to meet revenue target.