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Business community demands to bring 3.5% more people in tax net

Business community demands to bring 3.5% more people in tax net

LAHORE: Business community has demanded of the Federal Board of Revenue (FBR) to bring those 3.5 people into the tax net who are registered with the department instead of crushing the existing taxpayers. Just because of abusing section 38-B of the Sales Tax Act, misuse of discretionary powers by the FBR officials, raids at business premises and bank account attachments number of taxpayers has been fallen this year to around 0.9 million as compared to 1.1 during the previous year.

These views were expressed at a meeting, presided over by the Lahore Chamber of Commerce and Industry  (LCCI) Acting President Muhammad Nasir Hameed Khan, here at the Lahore Chamber of Commerce & Industry. Former LCCI Presidents Mian Anjum Nisar, Muhammad Ali Mian, Former Senior Vice President Irfan Iqbal Sheikh, former Vice President Kashif Anwar and Awais Saeed Piracha, Zeeshan Khalil, Mian Zahid javed, Mian Abdul Razzaq, Tahir Manzoor Chaudhry, Mian Muhammad Nawaz, Javed Siddique, Muhammad Arshad Chaudhry, Nasira Taskeen, Tanvir Ahmed Sufi, Syed Mukhtar Ali, Abdul Razaq Bubber, Khawaja Khawar Rasheed, Ghulam Sarr Malik, Maqsood Butt and representatives of trade & industrial associations spoke in the meeting.

They said that Section 38-B of Sales Tax Act, 1990 is being adversely used by the officials of tax department. They are paying visits to markets and godowns to unjustifiably harass the business people. They not only take coercive measures to raise unlawful tax demands without providing any supporting document but also carry all the available records with them. The participants of the meeting were of the view that teams from tax department should visit the markets, if indispensable, but they should immediately stop harassing business community. They said that if there is an urgent need for stock taking and ascertaining the Sales Tax liability of any particular business unit, the FBR officials should take association concerned or the Lahore Chamber on board.

All the participants said that FBR should stop harassing filers as non-filers and ones outside the tax net are not accounted for at all which discourages businesses to come into the tax net. Registered businesses are required to comply with various departments involving a lot of financial and time resources whereas unregistered businesses are free from all such hassles.

They said that there are 3.5 million registered taxpayers out of which only around 1 million file their tax returns. Government should take all the measures to ensure filing of returns by remaining 2.5 million individuals and businesses. The government claims that it always acts as a facilitator but in this scenario it is entirely otherwise.

They said that attaching bank accounts for recovery of outstanding dues is hampering business growth and tarnishing the business-friendly image of the government. They said that bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of Commissioner in the light of reply submitted by the taxpayer. The recovery should be after the decision of the Tribunal and not before that.

They said that unfortunately if the FBR initiates a recovery case, the taxpayer is not allowed to defend as FBR itself is the complainant and a judge. Instead of focusing on controlling under-invoicing, curbing smuggling and expanding the tax net, the FBR seems to be inclined to pressurize registered taxpayers who are already suffering due to high rate of sales tax, income tax and Custom duties by creating fictitious cases for recovery of outstanding dues to meet revenue target.

The Lahore Chamber of Commerce and Industry (LCCI) Acting President Muhammad Nasir Hameed Khan said that that undue notices and raids have created an atmosphere of harassment amongst the business community that must be stopped immediately.