ISLAMABAD: Pakistan's main tax machinery has linked the approval of a fixed tax regime for small and medium-sized merchants with the prior approval of the review mission of the International Monetary Fund, which is scheduled to arrive here on Sunday.
On October 28, the IMF mission, headed by Ernesto Ramírez Rigo, will begin reviewing Pakistan's first quarter performance (July-September) as part of the $ 6 billion Extended Fund Facility (FEP).
You will complete the exercise in two weeks.
An official source in the finance division said Dawn that during the review, Fund officials would hold meetings with all interested parties, including the Federal Revenue Board, the State Bank of Pakistan, those in the electricity sector, to assess the country's performance compared to the benchmark set for the first quarter
According to the source, the adviser to the Prime Minister of Finance, Dr. Hafeez Shaikh, and the president of FBR, Shabbar Zaidi, will hold meetings on the sidelines with IMF officials to convince them that a scheme is needed for traders. "We will try to convince them to obtain a favorable scheme for traders," the official said.
Merchants have demanded a fixed tax regime, which entails an exemption from sales tax and withholding taxes, with a sales threshold of Rs 150 million per year. They have also demanded a minimum tax rate as a fixed tax rate.
According to the official, these are the demands of the merchants. "We cannot commit to these demands," he said, adding that the demands would be assumed by Fund officials. "We will defend it as part of the Fund's program," he said, adding that an understanding could be achieved at a close level.
The Fund's mission will be delivered tomorrow in Islamabad for two weeks to assess performance.
FBR President Shabbar Zaidi told Dawn that his team was in talks with merchants. "We have already reached an agreement with traders on fixed tax rates," he said. However, he added, the FBR wanted a fixed tax regime by area, while merchants demanded it based on billing.
The president said the FBR had no problem, even in terms of rotation, that could be introduced only for small and medium-sized merchants, but "we have to address this problem with donor agencies."
Zaidi said that merchants at level 1 would remain at the point of sales position. "We have not finished anything so far," he said, adding that an attempt would be made to finalize the agreement before the protest of merchants across the country scheduled for October 29 and 30.
Extension of the tax base
The FBR president also gave information to Prime Minister Khan on Friday about expanding the tax base by using data from the National Database and the Registration Authority (Nadra).
According to an official statement issued after the meeting, the prime minister said that the expansion of the fiscal network is very important to improve the government's ability to provide better facilities to the masses. Nadra's president, Usman Yousaf Mobin, also attended the meeting.
He said the expansion of the tax network would not only reduce the burden on existing taxpayers, but also allow the government to guarantee the provision of education, health and other facilities in remote areas.
He said the government was striving to provide transparency in the tax system so that each citizen could play their role in the progress and development of the country. "The payment of taxes is a national obligation, however, restoring the trust of taxpayers in this regard is very important," said the prime minister.
Growth in tax returns
FBR President Shabbar Zaidi said FBR received a tax return of 918,027 from taxpayers through October 25 compared to 585,209 statements received during the corresponding period last year, showing an increase of 332,818 returns or 56.87pc.
On average, more than 20,000 statements were filed daily, he said.
On Twitter, the president of FBR said that as of November 1, 2019, strict measures would be taken against unauthorized interaction between FBR staff and the business community. "It is suggested to the business community to inform FBR if any person is contacted in any way without proper authorization," he said. "No harassment," he added.
According to him, the FBR will soon issue very strict instructions to all officers, employees and staff of all FBR formations so that they do not interact with employers through personal visits, phone calls, cell phone messages or emails. The automated / authorized system would be the only way to interact, he said.
Apart from the press conference on easy-to-do business, the Special Assistant to the Prime Minister of Information, Dr. Firdous Ashiq, said Mr. Khan met with relevant stakeholders on smuggling to assess profit and loss. from income.
He explained that a comprehensive strategy in this regard would soon be finalized. He said that one of the main components of the policy would be to share information online. In addition, he said, the prime minister would hold a monthly meeting to evaluate the anti-smuggling strategy.
FATF gray list
On the issue of the Financial Action Task Force (FATF), Federal Aviation Minister Ghulam Sarwar Khan said the government would verify Jamiat Ulema-i-Islam-Fazl (JUI-F) cane strength at the district level. "We will not allow them to reach the federal capital," the minister warned.
He said that the head of JUI-F, Fazlur Rehman, gave a wrong message to the FATF meeting based in Paris, as his cane strength was projected on social networks. In doing so, he projected a very negative image of Pakistan abroad, the minister said.
Last week, the FATF decided that Pakistan would remain on the gray list until February 2020 with a warning to further improve the implementation of the 27 actions of the International Cooperation Review Group.
Posted in Dawn, October 26, 2019