Crackdown on income tax defaulters from March 2020, NA body told

ISLAMABAD: The Federal Board of Revenue (FBR) has issued notices to over 200,000 income tax defaulters and that the board would initiate its crackdown on defaulters from March next year.

This was stated by FBR Inland Revenue (IR) Member Dr Hamid Ateeq during a meeting of the National Assembly’s Standing Committee on Finance, Revenue and Economic Affairs, which was chaired by MNA Faizullah.

Dr Ateeq said that the board had refrained from taking action against the tax defaulters owing to its commitment to the traders’ organizations. However, he added, following the expiry of the agreement signed with traders and after analyzing the tax returns till March, FBR would launch a crackdown against defaulters.

“We don’t want the traders and other taxpayers to go through difficulties. Our efforts are aimed at facilitating them. Currently, we are not taking the action despite knowing the details about defaulters.”

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Meanwhile, an FBR official informed the committee that over 700 market committees have been constituted to facilitate traders regarding the submission of turnover tax and registration.

However, a traders’ representative from Karachi claimed that they were facing difficulties in submitting returns as the condition of CNIC was still there in the system despite an agreement with FBR.

On this, the FBR official clarified the agreement was to avoid any action against the violators of CNIC condition till January 31, 2020.

Moreover, as the exporters of five selected sectors claimed that FBR could not achieve the desired results after abolishing the zero tax system, FBR officials claimed that the abolition added Rs55 billion (Rs23.3 billion local sales and Rs37.7 billion through exports/imports) to the board’s revenue during the past five months.

The FBR further informed that tax refunds worth Rs98.78 billion were released to the exporters from 1st July 2019 to 18th December 2019 which included Rs18.49 billion of adjusted refunds and Rs80.283 billion issued refunds.

According to FBR, the refunds included Rs22.34 billion under the head of income tax, Rs51.56 billion sales tax, Rs21 million FED and Rs 6.35 billion customs.

Earlier, the committee discussed the taxation issues being faced by the exporters, importers and retail sectors. The committee members expressed apprehensions with regard to the targets set by the FBR after removing the SRO 1125 related to zero-rated regime.

Discussing the tax exemptions being given to Chinese companies investing in Gwadar under the China Pakistan Economic Corridor (CPEC), the committee members asked the FBR officials to prepare a detailed report its implications on the Pakistani market. They also directed the FBR to share with them the exempted taxes in details.


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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]
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