Another amnesty scheme in pipeline for non-filer traders

ISLAMABAD: As small traders are all set to observe shutter down strike today (Saturday) against imposition of 0.3 percent withholding tax (WHT) on banking transactions from non filers, the government has offered business community to exempt them from audit for three years if they pay minimum fixed amount and declare their assets along with their returns.
A proposed tax incentive scheme exactly on pattern of another amnesty scheme for non-filer traders is in the pipeline. If the agreement is struck with the traders, the government would promulgate presidential ordinance to give legal cover after withdrawal of powers from the Federal Board of Revenue (FBR). Before lapse of the ordinance within 120 days, the government will table agreed changes before the Parliament to get approval.
The government assured the traders to come into tax net, declare their assets and the government will accept their returns along with minimum fixed amount of around Rs15,000 to Rs20,000 provided the new filers will increase their income tax amount by 25 percent in each year over the next two years.
“The finance minister has assured the business community that the new income tax return filers will not be made part of balloting for selection of audit cases,” President Federation of Pakistan Chamber of Commerce and Industries (FPCCI) Mian Idrees said while addressing a joint news conference along with Senior Member Inland Revenue (IR) policy Shahid Hussain Asad here at the FBR’s headquarters on Friday.
After holding meeting with Finance Minister Ishaq Dar and then FBR’s team, Mian Idrees said that the FBR would also accept assets declarations under the self assessment scheme and no question would be asked on their declarations of new assets.
The facility would also be available to the existing filers, who intended to declare their assets. However, this does not mean that a shopkeeper would declare an asset worth one billion rupees. After filing of returns and tax payment for the first time, traders would have to deposit 25 percent higher tax in the next three consecutive years to avail audit exemption.
The FBR’s Senior Member IR Policy Shahid Hussain Asad said that three constituted committees on income tax, sales tax and communication strategy would finalise their report till August 13 and would present before the government for final decision.
He said that there were complaints about ease of doing business. “Let me assure you that the FBR wants to facilitate business community,” he said. He added that Pakistan belongs to all of us and the country could achieve self sufficiency only by getting rid of getting loans of Rs1,000 to Rs2,000 billion per annum. “There is need to get contribution from all of us,” he added.
According to official announcement made by the Finance Ministry, Mian Idrees accompanied by former president FPCCI Zubair Tufail called on Ishaq Dar here Friday morning.
They discussed the issue of withholding tax on banking transactions with the minister in detail. They informed the minister about meetings with traders and representatives of various business spheres to ascertain their standpoint and apprehensions with regard to the withholding tax.
The minister assured the trade representatives that their fears, apprehensions and misunderstandings will be addressed appropriately. The minister reiterated that the levy of withholding tax was only applicable to the non-filers and the business community should have a clear understanding of this fact.
The filers, whether their income was in taxable limit or not, were all exempted from paying this tax. So they had nothing to fear from the imposition of withholding tax, the finance minister said. He added that this was a golden opportunity for the traders to file their returns of income with the tax authorities. On becoming filers they would automatically avail facility of exemption from withholding tax on banking transactions. He said FBR was pursuing business friendly policies and would welcome new entrants, broadening the tax net. The traders should completely remove any doubts from their minds that they would be subjected to persecution in future.
The finance minister said it was the responsibility of the citizens to fulfil their obligation towards strengthening of national economy and the business community. The minister said it had come to his notice that in some instances banks had deducted withholding tax on banking transactions of filers. He added that the SBP had been asked to instruct banks not to deduct withholding tax from banking transactions of filers and reverse the entries where this tax had been deducted erroneously. The minister said there was no excuse for holding strikes and harming the economy.
Ishaq Dar said Pakistan is moving towards growth and development everyone is responsible to contribute his share in this process.
The FBR in a statement on Friday stated that to remove any ambiguity, it is clarified that 0.3% tax on bank transactions is only an advance tax on non-filers of income tax returns. Non-filers can become “filer” at any time by submitting his income tax return.
Regarding difficulties that some businessmen may have in becoming filers due to their being out of the tax net, the government has set up three committees for making entry into the tax net easy.