Category: Pakistan

 

NUT Desk -ISLAMABAD: The government is evolving a comprehensive strategy to bring more retailers into the tax net from July 1, a senior official told media Tuesday.

The proposal was discussed at a meeting chaired by Finance Minister Shaukat Tarin at the Federal Board of Revenue.

Special Assistant to the Prime Minister on Revenue and Finance Dr Waqar Masood Khan and FBR Chairman Asim Ahmad briefed the minister on the development.

SAPM Dr Waqar Khan told media that a group of experts would be involved in broadening of tax base. He said the FBR would get data from the National Data Registration Authority for bringing potential taxpayers into the tax net.

The new system, he said, would be in place from July 1.

A spokesperson of the FBR said that ways for its better management and monitoring of broadening of tax base were being discussed. `Nothing has been finalised as yet,` the spokesperson said.The agenda of the meeting was to devise a strategy to increase integration of retailers with the Point-of-Sales (POS) system of the FBR and discussed the way forward to bring identified potential taxpayers into the tax net.

FBR Chairman Asim Ahmad, while briefing the meeting, said that the licensing of IT companies for installation and configuration of the POS system would be completed by the end of August. He said that monitoring cells would be formed in each RTO headed by respective chief commissioner to supervise the POS integration for achieving the desired results.

NUT Desk- ISLAMABAD: The Finance Bill 2021-22 has proposed some fundamental and sweeping powers for FBR officers for arresting and prosecution of taxpayers over concealment of income. According to the proposed changes, now all officers of Inland Revenue (IR) starting from Assistant Commissioner can arrest a taxpayer accused of a tax offence without even filing a complaint before the special judge.

Thus, a concept of pre-trial arrest and detention is being introduced to the income tax law for the first time. The only requirement for arresting a taxpayer is that the officer effecting the arrest ‘believes’ that the taxpayer has committed an offence that can be prosecuted under the law. Even the prior filing of a complaint before the special judge will not be required.

However, the Senate Standing Committee on Finance has rejected proposed powers of the FBR officers for arresting and prosecution of taxpayers on suspicion of concealment of income. The opposition members termed proposed powers of the FBR officers as ‘draconian’ and made it clear that they would not grant approval in the Parliament.

The question arises why the FBR proposed more sweeping powers when the Income Tax Ordinance (ITO) 2001 already has provisions for prosecution.

Tax experts say that the Income Tax Ordinance 2001 includes a complete chapter containing provisions for prosecution of a wide range of offences ranging from concealment of income to non-filing of returns and statements.

Punishments for these offences include imprisonment for periods extending from one year to seven years and fines up to Rs5 million.

These punishments are in addition to any other liability imposed on the defaulter under the ordinance, including the recovery of the evaded tax, imposition of penalty and default surcharge.

The procedure required for prosecuting and awarding of punishment to the defaulter includes filing of a case before a special judge appointed by the federal government.

Only a person, who is or has been a sessions judge, can be appointed a special judge for the purposes of trying income tax offences.

The Commissioner of Income Tax can file a complaint before the special judge who will conduct the proceedings under the Code of Criminal Procedure 1898. Appeal against the order of the special judge lies with the High Court. The defaulter can be arrested and imprisoned only after completion of the trial by the special judge resulting in award of punishment.

Now the Finance Bill 2021 proposes to make some fundamental changes in the procedure explained above and grant sweeping powers to the FBR officers for arrest and detention of taxpayers.

According to the proposed law, the officer initiating the arrest will intimate the special judge about the arrest and produce the arrested person before the special judge or a judicial magistrate within 24 hours of the arrest and the special judge may order his detention for an unspecified period or accept his request for bail.

The special judge on the request of the arresting officer may also remand the arrested person in the custody of the arresting officer for a period of 14 days for the purpose of conducting an inquiry. The provision of remand in the custody of the inquiry officer is self-contradictory because the arrest is supposed to be effected if the arresting officer has material evidence in his possession that the person being arrested has committed an offence leading to prosecution.

NUT Desk- KARACHI: The State Bank of Pakistan (SBP) has made some key amendments to its foreign exchange regulations to facilitate exporters to sell their products through international digital marketplaces.

`The key amendments proposed include framework for facilitating Pakistani exporters to sell their products through international digital marketplaces including Amazon, e-Bay, Ali Baba under Business to Business to Consumer (B2B2C)e-Commerce model,` said an SBP circular issued on Monday.

The central bank has proposed changes to its regulatory instructions for exports of goods from Pakistan while these changes aim to promote ease of doing business by simplifying the existing instructions. `Amendments required in export regulations to implement Pakistan Single Window Project, which would eliminate the requirement of electronic Form-E, are also part of the revised draft,` said the SBP. Likewise, in some other areas, regulatory approvals required from the SBP have been proposed to be delegated to banks to facilitate the business community, it added.

`The proposed changes are a part of SBP`s broader agenda to revise the existing foreign exchange regulations to align them with the changing market dynamics, business needs and global trade practices,` said the SBP. As a part of this process, 11 chapters (out of 22) of the Foreign Exchange Manual have already been revised through a consultative process with the banking industry and the business community, the SBP added.

NUT Desk- LAHORE: Punjab on Monday moved to check vehicular pollution, withdrawing proposed tax relief on old vehicles (major polluters) and slashing 75pc tax on electric vehicles to promote cleaner environment. However, it brought tractors` trade under the tax net by replacing the word `motor car` with `motor vehicle` in its finance bill and triggered fears that this essential machine for agriculture will become more expensive and hurt farmers and farming. The decision brings other vehicular dealers in tax net as well. The bill also moved to rope in all those professional (doctors, lawyers, services), who are assessed for the income tax, under the provincial professional tax, albeit for a paltry sum of Rs200 per year. The government repealed the Punjab Entertainment Duty Act, 1958 (X of 1958), bringing the entertainment services (cinemas, theatres, concerts, circus, sports events, races, film, fashion shows and mobile stage shows) under the purview of the Punjab RevenueAuthority (PRA) with introductory zero percent without input tax adjustment.

In the view of the proposal to assign the subject matter of entertainment duty to the Punjab Revenue Authority (PRA), the Punjab Entertainment Duty Act, 1958 is to be repealed while amending the Punjab Sales Tax on Services Act 2012 for this purpose. However, the government continued the ongoing tax relief worth Rs51bn on motor vehicle tax, property tax, Punjab Sales Tax on various services. It announced five percent discount on payment of tax through e-payment in the Punjab Urban Immovable Property Tax Act, 1958 for the financial year 2021-22. Further, the tax shall be paid on a yearly basis or half-yearly basis as the assessee may choose or the such later date as the government notifies, and for financial year 2021-22, the tax shall be collected as follows,

(i) in first quarter with five per cent rebate,

(ii) in second quarter, the amount of annual tax without any rebate; and

(iii)in third and fourth quarters, the amount of annual tax with one per cent surcharge per month on the gross payable tax.

The government has given relaxation to tax-payers through the Punjab Motor Vehicle Taxation Act, 1958 for the financial year 2021-22 by offering a discount of hve percent on the e-payment system. In financial year 2021-22, the tax shall be collected as follows: in first quarter with 10pc rebate, in second quarter, the amount of annual tax without any rebate; and in third and fourth quarters, the amount of annual tax with such penalty as may be determined under the Section 9.

The government has given relief by reducing the tax rates for various service sectors and rates of sales tax on services for ten service sectors, including beauty parlours, fashion designers, architects, laundries and dry cleaners, supply of machinery, warehouse services, dress designers and rental of bulldozers. The government also proposed expanding the scope of the reduced rate of sales tax rate of five percent on restaurants, via payments made through mobile wallets and QR (quick response) scanning.

The decision is made following the result of reduced tax rate through card payment which helped in the documenting the economy as well as providing relief to the taxpayers who support documentation.