Zaidi vows to power on with more tax notices, declares ‘war’ on smugglers – Newspaper

ISLAMABAD: The president of the Federal Revenue Board (FBR), Shabbar Zaidi, reiterated on Wednesday that the government will not withdraw from taxing trade and services as part of the measure to expand the country's narrow tax base.

It seems that Zaidi is not in the mood to go back to the aggressive documentation campaign launched by the FBR under his direction.

He emphasized these points when speaking at the 21st Pakistan Management Association Convention (MAP): Challenging Times, Winning Strategies, organized by MAP in Karachi.

A press release issued by MAP said Zaidi is also "declaring war" against smuggling scams starting September 1. Smuggling products are flooding the retail market without paying taxes and must stop, he said. The manufacturing sector, he said, was supporting the worst part of taxes, while the unorganized trade and services sector was getting rid of the situation, MAP's press release quoted Zaidi as saying.

The tax machinery is aggressively pursuing the extension of the tax base to some important services such as educational institutions, hospitals, doctors and teachers. "We have issued notices to these sectors to include them in the tax network," said Zaidi Sunrise.

Before the last budget, the president of FBR announced that all professional services: doctors, educators, public accountants, lawyers and engineers will be included in the tax network. However, the FBR has only issued notices to doctors and educational institutions so far.

Zaidi said that so far, 100,000 notices have been issued to incorporate these professionals into the tax network and added that several restaurants that pay taxes have also been notified. "All those sectors, which earn money now will have to pay their taxes due," said the president.

At the event, one of his comments that aroused some interest was that Pakistanis have assets worth around $ 120 billion abroad. However, when talking to Sunrise, clarified that the figure is its own estimate and not the FBR.

The figures, he said, have been calculated using the methods mentioned in his books a few years ago.

However, the FBR conducted a similar exercise in a recent year using data received from 41 countries under the tax treaty of the Organization for Economic Cooperation and Development (OECD) and found that 378 Pakistani residents own foreign assets worth only $ 5 billion abroad.

In May 2014, then-finance minister Ishaq Dar in a written response to the National Assembly revealed that at least $ 200 billion of Pakistani money is kept in Swiss banks. The claim was never justified by Dar during his tenure as finance minister.

It is worth mentioning that the Swiss government has not yet provided information to the government about Pakistani assets held in Swiss banks under the bilateral avoidance of the double tax treaty and the OECD multilateral tax convention.

On the issue of benami's assets, the FBR president said it was not easy to get details about benami's properties. "We have received information about benami's assets that came through court decisions," he said, adding that the government has stepped up the momentum against these properties.

The president said Prime Minister Imran Khan also ordered provincial governments to identify such properties.

On the issue of attracting merchants to the tax network, Zaidi said the government will not reverse its decision to seek details of CNIC on sales and purchases of goods for more than Rs50,000. "We have relaxed the condition until September 30," he said.

He said that merchants have already been informed about the simplified tax scheme. "We are discussing the proposed tax schemes with representatives of commercial agencies," he said.

The FBR, he said, has released digital software to facilitate the filing of tax returns and sales tax payments and federal excise taxes. "We are going to simplify the tax return even more," the president said.

He said the FBR received more than 2.5 million tax returns for fiscal year 2018, a historical figure that adds that the tax agency plans to increase the number to 4 million in fiscal year 2019.

Published on Dawn, August 29, 2019



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