Filers to get incentives, non-filers punishment in coming budget: FBR chief

Nisar Muhammad Khan says efforts will be made to simplify procedure for taxpayers; govt will be proposed to promote tax compliance culture in budget; State Bank Deputy Governor Saeed Ahmed Khan says filing of tax returns is a nightmare; Islamic banking must get incentives in coming budget; MCB chief Mian Mansha says cash bleeding of PIA, PSM must be overcome; Shabbar Zaidi proposes amnesty scheme for declaration of assets inside, outside Pakistan; Iftikhar Malik asks govt to come up with zero rating for export-oriented sector; LCCI Vice President Almas Haider says govt must abolish 1pc additional customs duty;

Arif Jeeva proposes per square foot tax for housing and building sector

By Mehtab Haider

ISLAMABAD: Chairman Federal Board of Revenue (FBR) Nisar Mohammad Khan Saturday said they would propose punishment for non-filers by enhancing tax rates in the upcoming budget.

“We will provide incentives to filers while non-filers will be penalized in the coming budget,” he said while speaking at the Pre-budget Conference 2016-2017 organized by the Jang Group here.

Nisar said the FBR would propose to the government to promote tax compliance culture in the coming budget.   “We will make efforts to simplify procedures for taxpayers,” he added.

Deputy Governor State Bank of Pakistan Saeed Ahmed Khan said there was fear related to deposits of banking sector with imposition of withholding tax on banking transactions for non-filers.

Citing his own experience, he said filing of tax returns was nightmare in Pakistan as he had to file two returns, one for the UK and one for the FBR, that 20 minutes in case of UK. He said two consultants were required to file returns.

He said the SBP had proposed to the finance ministry to reduce corporate rate of tax for the banking companies. 

“There is also need to bring incentives for Islamic banking in the coming budget,” he added.  “We also propose to the Finance Ministry to purchase property with 20 percent higher amount in case of finding mis-declaration to avoid tax evasion,” he added.

Tax expert Shabbar Zaidi proposed amnesty scheme for declaration of assets inside and outside Pakistan, making filing of wealth statement mandatory for every resident and non-resident Pakistani.

Known business tycoon and MCB chief Mian Mohammad Mansha Saturday said Pakistan needed higher growth to generate more resources and overcoming cash bleeding of public sector enterprises such as the PIA and Pakistan Steel Mills (PSM).

“I am depressed that some people defame me while sitting at the TV channels, as when the government made payments to the IPPs some people started a defamation campaign against me despite the fact that my IPPs got only 3.5 percent payment out of the total amount,” he said.

Mansha asked the government to make some changes in the law in order to stop the TV channels from leveling allegations. He said the country’s resources were scarce needing to be shored up.

“This country was built by those who made decisions for the sake of the country. The first Wapda chairman had called my father to get connection but when my father showed reluctance he offered them all kinds of facilities. Now the Wapda is facing a huge circular debt and has warned that circular debt would be bound to surge in case of bigger projects.”

“All institutions such as the PIA and PSM will close down one by one as how long we will bear cash bleeding of these public sector enterprises,” he added. He also called for abolition of super tax on the banking sector as well as reducing its rate of corporate tax to bring it line with the other sectors of economy. 

He said the country’s banking sector was facing multiple taxation as higher corporate tax was slapped on it. The prosperous segments are lawyers in the country, he said, adding that there was need to move ahead.

Mansha said he had witnessed the tenure of Sheikh Mujeeb-ur-Rehman and his daughter in Bangladesh adding that Pakistan could not achieve peace in the context of terrorism without creating jobs.

He said there was need to go for growth as increasing the size of the cake was need of the hour. He said Finance Minister Ishaq Dar had abolished Octori tax (Chungi tax) in 1999 and there was need to take more bold steps.

Dr Abid Hassan, former adviser of World Bank, said there was need to bring lower growth at the forefront in the national debate.

Saarc Chambers Chairman Iftikhar Malik said Pakistan required 7 percent GDP growth. He also asked the government to come up with zero rating for the export-oriented sector.

Vice President Lahore Chamber of Commerce and Industries (LCCI) Almas Haider said the tax returns analysis showed a dismal picture for the last year as total return filers stood at 8,55,429 out of which 3,22,438 filed returns showing zero income. 

“There is need to democratize taxes. The government must abolish 1 percent additional customs duty.”

Arif Jeeva said there was need to bring per square foot tax for housing and building sector. By imposing this mechanism, he said the FBR can collect Rs10 billion from this sector. He also asked the FBR to stop raiding builders as it was causing harassment to the taxpayers.