FEBR suggests special scheme to bring retailers into tax netAdmin-Kashif
FEBR suggests special scheme to bring retailers into tax net
The Frontier Post / August 26, 2019
LAHORE: The Friends of Economic and Business Reforms (FEBR) President Kashif Anwar has urged the government to formulate a special scheme for retailers to bring them into tax net so that tax base should be enhanced
In a letter written to FBR Chairman Syed Shabbar Zaidi he said if law makers are serious in broadening the tax base, they have to restructure the Sales Tax and Income Tax, making taxpayers-friendly policies, redrafting those sections which have empowered limitless authorities to them, undermining the rights of taxpayers and refrain non-filers from becoming part of formal economy.
In the letter, he suggested that for the enhancement of tax base, a special scheme for retailers should be formulated. “Those retailers who pay tax 15% more from the previous year by enhancing the turnover in the same proportion, there should be no audit for them. In this way the turnovers will increase by 100% after five years and substantial amount of tax will be collected.”
He proposed that it should be mandatory for all retailers to make verifiable purchases and feed them in their annual income tax return. Otherwise, their returns should not be acceptable.
“In order to enhance documentation, slabs of turnover should be made. As the Turnover increases, the rate of tax must reduce proportionately. Those retailers who adopt this scheme should be exempt from minimum tax at Rs.10Mn and becoming withholding agent at Rs.50 million.”
Kashif Anwar called for legislations through parliament to safeguard the rights of existing taxpayers. The former vice president of the Lahore Chamber of Commerce & Industry, asked the economic team of the government to respect existing taxpayers and safeguard their rights by legislation against the misuse of discretionary powers by the FBR. Create harmonization between Sales Tax & Income Tax laws by removing those provisions which conflict with each other, he said and suggested to enhance tax base by automation and integration of revenue departments with other public entities.
It is very important in current economic conditions of Pakistan to increase the tax base and enhance revenue collection to cater the augmenting fiscal deficits. It is a bitter reality that the compliance of law has become very difficult and is for those who are in the tax net like audits, submission of statements, returns, maintenance of record etc.
Due to lack of awareness and low literacy rate, no one is fully aware of the daily changes in tax laws. A filer is always under the fear of being questioned by the tax authorities and as per law a person who has an NTN is eligible for audit. In order to win the confidence of retailers and bring them in the tax net, the government should formulate for them a special scheme over a period of Five years.
He said that the government has to highlight the benefits for those who are in the tax net which incentivizes and stimulates the unregistered persons to contribute voluntarily towards documentation of the national economy.
Appreciating the government, he said that owing to prudent, timely and swift tax reform policies of the government, the income return filing base has widened by around 43 percent to the record level of 2.5 million filers, as 0.750 million news return tax-filers have registered themselves in the tax system so far.