fixed tax rate will depend upon the size and location of the shop.
He said the fixed tax will be still less than the amount that the traders are currently paying in bribes to lower staff of the Federal Board of Revenue (FBR) and to lawyers to keep the tax authorities away. He said in case no agreement is reached with the traders, the government may further extend the date for filing income tax returns, which is ending on November 30.
Dar said if the traders accept his offer, at least five million new people can come under the tax net as against the current level of less than one million income tax filers.
Dar said that 0.3 percent withholding tax rate is helping to penalize non-filers of the income tax returns and the levy will help force them to come into the tax net. He claimed that in last four months, about 100,000 more people came in the tax net.
The minister said a group of traders wanted to whiten hidden assets by exploiting the opportunity but they should know that it was not a tax amnesty scheme.that it is not tax amnesty scheme. He said during negotiations the traders admitted that they had parallel undocumented bank accounts at the name of their drivers and cooks. He said if the traders agree to his proposal, the government will bring a bill in the Parliament to give legal cover to the scheme.
Dar also made his plan public to settle the outstanding tax refunds of roughly Rs200 billion. A mechanism can be agreed where refunds may be cleared over a period of two to three years and the taxpayers will be compensated by paying them about 7 percent in profit on delayed payments.
On devaluation, he said without naming the IMF that “the idea that Pakistan’s rupee against the US dollar was overvalued by at least 10 percent is an imported one and is pushed by someone else”. Dar said that he had told them in front of the prime minister that the market forces would determine the value of exchange rate and had nothing to do with the desire of anyone. Contrary to the IMF assessment that Pakistani rupee was overvalued by 10 percent, the minister opined that the rupee was actually undervalued by at least 8 percent.