National Assembly's Standing Committee on Finance has unanimously approved "Tax Laws Amendment Bill 2012" designed to increase total taxpayers to 2.2 percent of the total population from existing 0.3 percent by bringing 3.8 million potential taxpayers into the tax net. Federal Board of Revenue (FBR) Chairman Ali Arshad Hakeem said only 0.3 percent population is paying tax which would be increased to 2.2 percent subsequent to implementation of the proposed amnesty scheme.
The walkout by the Muttahida Qaumi Movement (MQM) and support by Pakistan Muslim League (PML-N) allowed the ruling party to pass the law unanimously. Finance Minister Saleem Mandviwalla explained to the committee members who had serious reservation on the law that proposed tax laws amendment are not meant to grant exemption to the existing taxpayers but their purpose is to bring non-taxpayers into the tax net.
The FBR Chairman said 2.9 million potential taxpayers have been identified on the basis of their consumption patterns. He said this was possible by the linkage between the data of FBR and National Database and Registration Authority (Nadra) and the number of potential taxpayers on the basis of their consumption patterns has now increased to 3.8 million.
The Finance Minister said the government would offer an opportunity to potential non-taxpayers to become taxpayers by paying a specific amount and the government would not question their past liabilities. The minister said if the people identified by the tax authorities did not avail the offer, the government would go after them and their Computerised National Identity Cards (CNICs) would be blocked, so as to stop them from making any transaction or undertaking foreign travel. Mandviwala said the scheme would be a step towards documentation of the economy and would equally target the rural and urban taxpayers.
He said tracking of potential taxpayers on the basis of their consumption pattern would also help the tax authorities to bring land owners or agriculture sector into the tax net. In reply to a question about the benefit to the existing taxpayers, he said the government would be able to reduce tax rates after bringing the non-taxpayers into the tax net which in turns would benefit the existing taxpayers.
Minister for Information, Qamar Zaman Kaira said people with agriculture income would no longer be able to hide their income from the tax authorities because their expenses would be reflected in the indicators of Nadra, as explained by the Chairman FBR and would not be able to escape the tax.
Shahid Khaqan Abbasi of Pakistan Muslim League (N) supported the treasury benches and stated that the implementation of the proposed law would make agriculture sector liable to file tax return. Committee Chairman Khawaja Sohail Mansoor refused to become part of the meeting and walked out along with Abdul Rashid Godial allowing Nafeesa Shah of People's Party to chair the meeting of the committee. Subsequently, the committee meeting presided over by Nafeesa Shah passed the law unanimously with the support of PML-N parliamentarians.