Issuance and payment of promissory notes is expected to start next month, said Federal Board of Revenue (FBR) chairman Mohammad Jahan Zaib Khan.
Addressing a function in Faisalabad Chamber of Commerce & Industry (FCCI), FBR chief said earlier a cut date of Feb 15 was given to issue the promissory notes but State Bank of Pakistan and Finance Ministry raised some irritants. These issues have now been resolved while it has also been approved in the Finance Supplementary (second amendment) Bill 2019 and hopefully the payments of refund claims through promissory note will be starting next month. He said a fair system is being evolved under which the promissory notes will be issued to the exporters who will opt for it. "Cash payment will also continue side by side," he assured and told that one third payment of total refund claim will be made in cash while remaining will be settled through promissory notes. "Ten percent markup will be allowed on these promissory notes which will be paid after three years", he added. However, these promissory notes will also be acceptable and valid trading instrument in the financial market.
He further told that every individual is responsible to pay taxes and system will take its own course when they will fail to fulfill mandatory obligations. Regarding 40-B, he told that the persons involved in under-reporting are on FBR radar and could not conceal their actual tax liability. However, he offered to declare Faisalabad "40-B free" if they agrees to give the certain revenue targets and in this connection FCCI will have to play its role as a guarantor. Regarding 40-B, he said that this law was implemented in another city where a visible improvement of 70 percent was recorded.
Regarding distortion in the working of Provincial Revenue Authorities (PRA) and FBR, he said particularly the sales tax laws are not fully harmonized. National Finance Commission (NFC) has established a working ground which is reviewing different proposal to resolve this issue. He said FCCI and other chambers should also present viable proposals to resolve this ticklish issue. He said although every province has different views yet FBR is trying to evolve a mutually acceptable way to file a single return.
FBR chairman told that tax system has some inherent complications and we have to sit together to resolve the same. In this connection, he told that a commissioner level female officer has been nominated as focal person at the FBR. He said that business community through their relevant chambers could approach her to get resolved their genuine problems. He said that the said focal person will also help for the efficient follow up of the decisions taken during the meetings between business community and the chairman FBR.
Jahan Zaib Khan said traders are also integral part of our economy and we must bring them into tax net to resolve our financial problems. He told that a simple and easy tax system is being evolved for the small traders which will be initially implemented in Islamabad. He asked president FCCI to submit its proposal to further fine tune this system.
About trust deficit between taxpayers and tax collectors, he said through social evolution of last many decades, we have to change our mindsets. Regarding the harsh language of tax notices, he said it was designed during the colonial era but he is ready to change the same at the earliest. Commenting on the problems of the business community, he told that some of them are forced to open fake bank accounts. He said Financial Action Task Force is already reviewing our financial system. "It is of the opinion that Pakistan's financial management system lacks credible safeguards. He said that the laws are being improved to facilitate the business community. He also mentioned Finance Supplementary (second amendment) Bill 2019 and said that it was prepared by the FBR and hence not new tax was proposed in it and rather we have facilitated the business community. He told that government revenue will automatically increase with positive growth in the businesses. He mentioned the tax to GDP ratio and said it is 11.4 percent with this dismally poor and we could not even meet our domestic expenditures with it. He said that this ratio should be enhanced to 20 percent and government is working on it.
Earlier, FCCI president Syed Zia Alumdar Hussain welcomed the FBR chairman and told that FCCI and FBR have cordial relations and in this connection FBR had started many schemes from Faisalabad. He also presented a brief of Faisalabad and FCCI and said that this city was contributing a sizable share in national economy in addition to generating much needed revenue for the national kitty. However, he expressed concern that that irrational recovery targets are fixed which become problematic not only for the business community but also for the FBR. He said that our growth rate is only 5 to 6 percent while recovery targets are fixed at 15 percent. He further said that in order to achieve these targets the FBR tightens noose against the neck of existing tax payers instead of digging out new taxpayers. He mentioned the visit of Federal Finance Minister Asad Umer and Adviser to Prime Minister on Commerce Abdul Razzak Dawood and told that prudent decisions were taken but these are not fully implemented yet.
Chartered Accountant Iqbal Ghauri explained in detail the budget recommendations while Engr Rizwan Ashraf, Dr Khurram Tariq, Naveed Gulzar, Rao Sikandar Azam, Haji Aslam Bhalli, Shabbir Hussain Chawala, Rehan Naseem Bharah, Chaudhry Mohammad Nawaz and Mian Aftab Ahmad explained their sector specific problems.
Later, former president Federation of Pakistan Chambers of Commerce and Industry Mian Mohammad Adrees offered vote of thanks. He also presented a proposal to expand the tax net through 'no registration-no business' formula. Mian Mohammad Adrees along with Syed Zia Alumdar Hussain and Zafar Iqbal Sarwar also presented FCCI shield to the FBR chairman Mohammad Jahan Zaib Khan.
Earlier, budget proposals for 2019-20 were also presented to Mohammad Jahan Zaib Khan. Madam Seema Shakil Member Inland Revenue Operations, Asad Durrani of Customs, Tariq Chaudhry Commissioner Inland Revenue Faisalabad, Mian Tanvir Ahmad SVP and Engr Ihtasham Javed VP were also present during this function.