In an exclusive conversation with Daily Business Recorder after concluding session of pre-budget seminar organised by Karachi Tax Bar Association (KTBA) in collaboration with Association of Chartered Certificated Accountants (ACCA) at a hotel here, Rehmatullah Wazir, member IR Operations confirmed that field formation was given go-ahead to launch massive crackdown against 21000 'nil' returns filers including traders, industrialists, high income individuals, etc from March 14, 2017 (today).
He said that FBR picked these 21000 registered persons after detecting serious irregularities in their returns; adding that these registered persons, who paid Rs 10 billion and Rs 11 billion income tax in tax year 2014 and 2015, respectively, astonishingly filed 'nil' returns in year 2016, forcing the tax authority to kick off crackdown against them. Wazir said that board is expecting to generate Rs 15-20 billion revenue from said exercise; adding that field formation was directed to take all possible measures for the recovery of evaded income tax.
Earlier, in his speech, member IR operations said that agriculture sector, which contributed nothing to the exchequer, should be brought into tax net as provinces were able to collect only Rs 1.9 billion from this sector, despite 5.7 percent growth. In response to the budget proposals recommended by the speakers, he said that FBR is not policy making institution hence all proposals would be forwarded to the policy makers. Moreover, he said that only 0.8 percent total population was paying taxes while rest of them is not ready to pay taxes and added that these registered persons were also concealing their earning to evade taxes.
He said that board, which was also supporting the proposal to reduce corporate tax rate, would try its best to convince the authorities and suggested to introduce one sales tax return where columns for federal and provincial tax deductions would separately be mentioned, which he believed would facilitate the taxpayers. Rehan Jafferi, President KTBA said every poor of this country was taxed in the shape of contributing its undue share to the exchequer in terms of indirect taxes which were built in cost of product and then ultimately passed on the consumers.
He said that Bar is regularly advising the board for enhancement of Tax to GDP ratio, increasing of the tax base and documentation of the economy and long term tax vision. Moreover, he said that reforms and facilitation are needed for broadening of the tax base and termed imposition of penalties in case of late filing of tax returns and withholding statements as big challenge for the taxpayers, saying that this was due to the "Black Law" of penalties under which huge amounts are prescribed under different provisions of the statute. Keeping said in view, he suggested Finance Minister and FBR to revisit the old law in this regard.
Haider Ali Patel, Asif Haroon, Arif Masud Mirza and Omer Zaheer Meer gave budget proposals through electronic presentations on direct and indirect taxes and other tax related issues. A large number of tax practitioners attended the seminar.