Prime Minister Imran Khan has once again asked people to take advantage of the tax amnesty scheme ending on June 30, by declaring all the assets to avoid any difficulties in the future.
“I want you to face no troubles. (All) of the data is available with the FBR (Federal Board of Revenue). By visiting FBR’s website, you can access your data and know what kind of information we have collected,” said Khan in his televised message to the nation. “I don’t want you to face any difficulty.
“Therefore, I want you take advantage of it (scheme) and steer the country out of this difficult time.”
The prime minister, who had also addressed the nation on the subject on June 11, hours after the announcement of the federal budget 2019-20, said that the country’s foreign debt had swelled from Rs6tn to Rs30tn during the last decade.
He said that half of the tax revenue had been spent on paying the mark-up of the said loans.
“This means we are entangled in a debt trap. Today, we are taking loans just to pay back the mark-up on the previous loans,” Khan said.
He said the country’s condition had worsened to this extent only because of corruption and tax evasion.
Khan said that the people should not worry about corrupt elements, as the government would not pardon them in any way.
In order to curb the tax evasion, he said the government needed public support, without which the country could not escape the debt trap.
Khan said that the tax amnesty scheme gives people a chance to declare the money, foreign currencies and gold they had kept at home, foreign assets and undeclared assets.
“This is a golden opportunity for you,” he said.
The prime minister stressed that the country could not get rid of the loans unless both the people and the government resolve to do so.
He said that he had seen the country come together during the construction of Shaukat Khanum Hospital, the 2005 earthquake, and flash floods in 2010, when every Pakistani from across the globe contributed to support the people and country facing the loss worth billions of dollars.
“We can come out of this (debt trap) easily. We have to collect Rs5,500bn (tax revenue) during next (fiscal) year. I think we can collect above Rs8,000bn every year if nation decides so,” the prime minister said.
This would help resolve all economic issues, making the country self-sufficient, rid the people of poverty and brighten the future of next generation, he added.
Meanwhile, the FBR is all geared up to launch a drive against jewellers and moneychangers in possession of undeclared gold and foreign currencies, respectively, official sources said.
The tax authority has been tasked with meeting a mammoth Rs5.55tn revenue collection target set for the fiscal year 2019/20 (FY 20), which is impossible to realise without out-of-the-comfort-zone efforts to expand the tax base and record the undeclared economy.
The sources said that following the passage of the finance bill for next fiscal year in parliament, the FBR would get powers to raid premises of businesses possessing undeclared gold, bearer certificates, and foreign currencies.
Presently, a commissioner of Inland Revenue is barred from taking such action against aforementioned undeclared assets.
Tax experts at Deloitte Yousuf Adil Chartered Accountants firms said that the powers had been sought to discourage hoarding of foreign currency and to encourage documentation of the economy.
They said that such powers had already been available under Section 175 of the Income Tax Ordinance 2001, which empowered a commissioner to take action related to enforcement, audit and survey of a taxpayer.
“This section empowers the commissioner to impound and retain taxpayer’s manual or computerised record,” Deloitte Pakistan said in a tax commentary.
The Finance Bill 2019/20 has proposed to enhance the powers of a commissioner to raid premises after receiving credible information about the presence of undeclared gold, bearer security or foreign currency, and confiscate the same.
A senior official at Regional Tax Office (RTO)-II Karachi said the proposed changes are in line with the government’s commitment to bring all segment of the economy into the tax net.
The official said the RTO-II had held a meeting with representatives of jewellers association recently and apprised them about the proposed changes through the finance bill.
The jewellers have been asked to avail the asset declaration scheme to declare their concealed assets before the initiation of stern action.
The official said the office had already conducted surveys of jewellers market in various parts of the city, and identified a huge gap of sales and use of raw material.
“From July 1, 2019 the RTO-II will initiate action against them and conduct raid to confiscate undeclared gold,” the official added.
Similarly the FBR also held talks with exchange companies and encouraged them to declare the details of their sales and purchases of foreign currency and avoid hoarding.
In the past it had been witnessed that tax machinery in India had exercised similar powers and recovered huge amount of undeclared gold, local and foreign money, the official said.
Commenting on the proposed powers, former FBR official Rehmatullah Khan Wazir said that these were contrary to directives of the revenue board’s chairman as the latter had barred tax officials from raiding business premises.
He said that the FBR should outline a policy to ensure such powers are not misused.
Wazir said such changes had shown the intention of the government to bring a major reform in the taxation system of the country.
“But such abrupt changes may backfire,” he said, adding that the proposed raids would result in flight of capital.
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