Broadening tax net: FBR to issue notices to 0.7 million people

The Federal Board of Revenue (FBR) will issue notices to 700,000 people having luxurious lifestyle but paying no tax by March 21, 2011 in a move to broaden tax net, Chairman Federal Board of Revenue (FBR) Salman Siddiqui informed business community on Saturday. Addressing members of Korangi Association of Trade and Industry (Kati), he said that these people had lavish lifestyle.
He said that FBR has identified around 2.3 million people living luxury life in the country contributing nothing in taxes, whereas around 700 people are extremely rich. The chairman said that country might generate Rs 100 billion revenue if income tax was imposed on agriculture income.
The chairman said that time is ripe to increase revenue generation in order to run the country. However, he ruled out to generate revenue by power and added that perusing people is the better way to increase revenue. Salman Siddiqui assured business community that FBR would remove their reservations arising due to issuance of three SROs recently.
He further informed that Finance Minister Abdul Hafeez Shaikh likely to chair a meeting related to five zero rates sector schedule to be held on Sunday. The chairman expressed hoped that zero rated sector issue would be resolved amicably.
Salman Siddiqui also assured that the issues and concerned expressed during his two days meeting with business community in Karachi would be resolved amicably and in consultation with stakeholders. He sought the help of business community in preparation of coming budget for the year 2011-12. The chairman made it clear that imposition of fresh taxes through SROs is not Value Added Tax (VAT).
He said that he has requested finance minister to visit Karachi and brief business community about SROs and removed confusion. He said that there was some improvement seen in refunds of taxes, however refund system would be further improved and efforts would be made to refund exporters'' claims in time.
He agreed the idea of public-private partnership and pointed out that Sunder Industrial Estate is a good example of the system, while Lahore-Faisalabad Road has also been constructed in public-private partnership. The Chairman Kati, Syed Johar Ali Qandhari expressed concern over the new taxes imposed recently by the government terming them as detrimental not only to the trade and industry but the national economy would also be badly hurt.
He termed the imposition of import duty on plant and machinery as the last nail in the industry''s coffin. He earnestly demanded to reverse this decision and all the machinery lying at the port should be cleared duty free. He also demanded of the FBR to revert the decision to withdraw the zero-rating on exports.
The Chairman, Kati''s Standing Committee on FBR and Economic Affairs, Mian Zahid Husnain has advised the FBR to find out various avenues of revenue generation instead of over-burdening the already heavily taxed trade and industry. He pointed out the leakage of over an amount Rs 180 billion due to line losses of electricity companies.
He said that a total number of 1.5 million TV sets have been imported under Afghan Transit Trade and it is understood that they all were re-imported into Pakistan in 2010, incurring losses of billions of rupees to the national exchequer.
He said that Korangi industrialists never indulge in any confrontation with the government functionaries and they should also be treated on priority. He said that stakeholders welcome the FBR chief''s announcement to remove anomalies in the SROs issued recently. He, however, demanded that taxes imposed on exports and plant and machinery should be withdrawn.
Senator Abdul Haseeb Khan while speaking on the occasion said that due to the current economic scenario people''s woes have crossed all limits. He pointed out that as many as 1,500 industries have been closed down during the last three years.
During the meeting leader of business community and former president FPCCI, S. M. Munir calling from Canada asked the FBR chief to immediately withdraw the decision to impose taxes on import of plant and machinery. He said that imposition of tax on plant and machinery is unjustified and would cripple the country''s industry.