ISLAMABAD: The Benami law is likely to become operational later this week, allowing the government to confiscate all properties and bank accounts that wouldn’t be registered under the name of the real owner.
Addressing a press briefing here, Member Inland Revenue Policy, Federal Board of Revenue (FBR) Hamid Ateeq Sarwar said that this was a very harsh law under which the government would confiscate all properties and bank accounts that would not be registered with the name of the real owner.
He informed that the Benami Act was passed in January 2017, and now after finalizing of its rules and regulations, the law would become operational by February 7 or 8.
He said this law would act hard on those who register their properties, bank accounts, or vehicles on other beneficiaries’ name in order to evade taxes.
Briefing the media about revenue collection, Member IR operations, Seema Shakil said that during the period July-January 2018-19, the FBR collected Rs. 2,060.757 billion against a collection of Rs. 1995.277 billion collected during the same period of last year showing an increase of around 3 percent.
She said that there was a shortfall in revenue collection mainly due to relief in tax measures while the contraction of Federal Public Sector Development Programme (PSDP) also negatively impacted the revenue collection.
She said the FBR was expecting a revenue shortfall of Rs. 3.5 billion by the end of June 2019, against the target of Rs. 4398 billion set by the government for the year 2018-19.
She informed that during the period under review, total domestic revenue stood at Rs. 1,057.651 billion against Rs. 1,050.455 billion collected during the first seven months of the year 2017-18.
Similarly, total revenue collection on imports stood at Rs. 1,003.105 billion during July-January (2018-19) against Rs. 944.822 billion collected during the same period of the preceding year.
Total income tax also increased to Rs755.075 billion from Rs754.902 billion, while net sales tax increased to Rs798.832 billion in July-January (2018-19) from Rs 805.163 billion in the same period of last year while that of customs duty increased from Rs. 330. 217 billion to Rs. 389.456 billion, she added.
To a question, Hamid Ateeq said tax relief announced by the government recently would help increase in revenue in the long term.
“The government had two options whether to raise taxes immediately or to give tax relief in a bid to strengthen economic growth in the country”, he added.
He said if the government had opted to raise taxes, although it would help increase revenue for short time due to this move, the government would have lost confidence among the business community and common people ultimately damaging the economy in long term.
On the other hand, he said the relief measures might have some short-term negative impact on revenue collection, but it would help increasing level of trust among the people and the business community on the government.
To another query, he said the only solution to resolve the matter of overlapping of taxes among provinces and between provinces and federation, was an establishment of a single tax authority.