Failure of Amnesty Scheme Forces FBR to Conduct A 3rd Party Survey
6 days ago
Federal Board of Revenue (FBR) has decided to launch a third party survey of retailers across the country after failing to include retailers in the tax net.
The Board launched an amnesty scheme last year in order to include traders in the tax net. With the scheme, the government offered the traders to legalize their hidden working capital worth up to to Rs 50 million by paying only 1 percent of their declared amounts in income tax.
Amnesty Scheme Recap
The scheme failed with only a handful of people declaring their working capital. This forced the government to extend the deadline.
Officials at FBR argue that the government should enforce the originally planned 0.6 percent withholding tax on transactions higher than Rs. 50,000 for non-filers. The government tried to increase the withholding tax to 0.6 percent but opposition from the traders forced them to revert it to 0.3%
Digital Directory of Retailers
Fast forward a year and the FBR is gearing up to launch a survey for preparing a digital directory of all the retailers in Pakistan. The Board will be carrying out a Geographic Information System (GIS) mapping of the retailers. FBR has also invited IT firms for Expressions of Interest for the purpose of conducting the survey.
According to an official, third parties were signed up for the task to avoid having the taxpayers interact with tax officials at the FBR.
Estimates say that there are around 1.5 billion retailers in Pakistan with the potential to pay Rs. 100 billion as tax annually. The retailers contribute towards 18% of the GDP, with less than 1% paying due taxes.
Legitimizing Black Money
Another tax scheme was approved in the National Assembly around 4 months ago. People who avail this amnesty need to pay a 3% penalty as advance income tax to legitimize the remaining 97%.
Called the “Income Tax Amendment Act 2016” it was pushed by PML-N through the lower house of Parliament.