Compliant traders to be in active taxpayers list within 72 hours: FBR

Voluntary tax compliance scheme

KARACHI: The traders opting for tax amnesty scheme will be included in the active taxpayers list (ATL) within 72 hours and be entitled to all the benefits, including exemption from a withholding tax, a tax official said.  

“We encourage and facilitate new taxpayers and for the purpose a single-page very simple return form has been designed, and it needs to be manually filed,” said Rehmatullah Wazir, Member Inland Revenue (IR) Policy of the Federal Board of Revenue (FBR).

Wazir, addressing a seminar on voluntary tax compliance scheme organised by the Karachi Tax Bar Association, said existing return filers could also benefit from the scheme.

He said sales tax registration is not required for availing the amnesty. However, traders filing sales tax returns will not be able to benefit from the scheme, he added.

The Member IR said taxpayers, who were issued notices in the past, could also benefit from the scheme. The scheme does not provide any withholding tax credit though, he added.

He said certain clarifications and explanations will be issued soon, “so that tax practitioners and taxpayers have accurate understanding of the scheme.”

Chief Income Tax Policy FBR Vishno, alias Raja Qavi, said the scheme was announced after detailed discussions and deliberations spread over multiple rounds of meetings with representatives of chambers and trade bodies across the country. “The scheme is as per the aspiration of the traders and business community for promoting a culture of tax compliance in the country, which would also result in broadening the tax base,” Qavi said.

The tax scheme enables traders to whiten their undeclared working capital of up to Rs50 million by paying one percent tax of the declared working capital in the tax year 2015. The non-filers are those traders who did not file any income tax return over the past 10 years.

For the tax year 2016, traders will have to declare turnover at least three times of the working capital declared in the tax year 2015. For the tax years 2017 and 2018, traders will declare turnover on which paid tax is at least 25 percent more than the tax paid for the preceding year. Traders can also opt for turnover tax for the next three years.

Filers will be those who possess national tax number and filed one or more income tax returns over the past 10 years. Under this scheme, three options have been proposed for the traders. Under the first option, a trader will have to pay 25 percent higher tax than paid in the last return on the basis of taxable income. Under the second option, he can avail himself of three turnover tax slabs, and under the third option, can pay a total of Rs30,000 for not paying any tax in the last return.

For tax years 2016, 2017 and 2018, it has been proposed that traders will have to pay 25 percent higher tax than paid in 2015 on the basis of taxable income. They can also opt for the three turnover tax slabs for 2016-18.