FBR chief rejects rumours, says no tax imposed on edible items

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Shabbar Zaidi said on Friday that no tax has been imposed on edible items, including flour and ghee.

Addressing a press conference, he said the government

would desist from taking any decision that was counterproductive for the local
industries, adding that misleading information was being spread regarding sales
tax on zero-rating industries, CNIC issue and imposition of tax on edible
items.

The FBR chairman said that the board was engaged in negotiations with the country’s business community and was mainly discussing issues pertaining to the zero-rating regime and requirement of CNIC for sales tax.

Clarifying that the CNIC requirement was only

for sales tax, he said that confusions were being created on the issue as some
people were “trying to resolve their other problems” by exploiting this matter.

The FBR chairman said that the CNIC requirement

had not emerged in income tax law, rather it came under sales tax law. He said
that out of 220 million people, there were around 47,000 registered in sales
tax, whereas only 19,000 were paying taxes.

Zaidi said that FBR wanted to introduce a fixed

tax scheme for small shopkeepers as this would resolve the CNIC issue. However,
he added that there was a need to define 'small shopkeeper' and urged the
business community to draw these limit lines.

The FBR chairman clarified that there was no

deadlock between the board and the business chambers on the issue of
zero-rating. “Since this issue has come back after around 12 years, so it will take
time to settle.”

He said that the FBR’s aim was to enhance the tax base of the country and it was working to achieve this objective.

He refuted the news articles appearing in a section of press, claiming imposition of tax on flour and other edible items. "Some sections of the media are only spreading rumours in the market."

He urged the media to support the FBR in creating awareness among people regarding the tax reforms and expansion of the tax base, adding that there were people who want to stop the reform process.

The FBR chairman said he has asked the district

administration of Islamabad to take strict action against those who were
involved in market deception and tax fraud.

Replying to a question, he said the FBR wanted to automate the tax system in order to reduce human interference. “This will help make the board's reform strategy successful.”

The FBR chairman said that section 114 authorizes the FBR to send tax notices to people who own house in excess of 500 yards.

Replying to another question regarding the mobile importers, he said that duty-free mobile importers wanted to come into the net but they were not willing to pay the actual taxes.

The FBR chairman said the government was committed to addressing the issue of under-invoicing in order to document the country's economy.