ISLAMABAD: Finance Minister Shaukat Tarin said on Monday that delay of two to four days in the approval of the Finance Supplementary Bill, 2021 would not be an issue as the International Monetary Fund (IMF) can extend board meeting couple of days beyond January 12, 2022.
Talking to reporters after launching the tax directory of Parliamentarians for tax year 2019 at the Federal Board of Revenue (FBR), he stated that if the approval of the finance bill is delayed for two or four days, there would be no issue.
A date of January 12 has been fixed with the IMF and it should not be any problem for the Fund to extend it for two or four days, the finance minister added. He further stated that the supplementary finance bill would be introduced in the Senate today (Tuesday) and is expected to be cleared from the Senate in four days. Subsequently, the bill will then be passed by the National Assembly.
Earlier, addressing at the tax directory launch, the finance minister said that the government would start sending tax notices to 15 million people from ongoing month (January) on the basis of assessment determined through their consumption pattern, travel and utility bills, etc.
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He said that 15 million people’s data is available with the FBR and the National Database Registration Authority (NADRA) and through artificial intelligence their income would be assessed on the basis of their bank accounts, travel history, utility bills, etc.
We will start sending them notices and place the record before them of their consumption pattern and in case of any objection they would have the option of third-party audit.
Tarin regretted that out of three million return filers, only two million are paying taxes and his target is to increase the tax-to-GDP ratio to 20 million in the next five to six years to put the country on six to seven percent GDP growth.
Presently, the tax-to-GDP ratio is between 10-12 percent. The government policy is that everybody should pay his/ her share of taxes as there are no sacred cows, he said.
Tarin said that tax rate would be reduced with the increase in revenue. He regretted that the country was facing serious fiscal problem due to low tax collection and have to borrow for development expenditure. He said that everyone was evading taxes as per his capacity.
The finance minister said that there is distortion in taxes as some taxes being collected at the federal level and some at provincial level, which necessitate the need of harmonisation in taxes, so that federal and provincial departments should not harass the people.
The government is collecting withholding taxes because we do not have the option to collect taxes from other sources. There is no justification of “turnover tax” because if a company is in losses how it can pay turnover tax.
Tax should be paid on the basis of income generated by a company and loss making companies should not pay turnover tax. “We are sometimes unfair with the taxpayers,” the finance minister remarked.
We have to go for simplification of tax and there should he only two taxes, sales tax and consumption tax, and remaining have to be removed gradually. He said that there is no point of turn over tax and have to go to progressive taxation and if there is income it should be taxed. There should be, at least, 20 million taxpayers in the country on the basis of the country’s population, he said.
Copyright Business Recorder, 2022