TDAP Bill 2012 passed: Tax Amnesty Scheme Bill introduced in NA

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ISLAMABAD: The government on Monday introduced “The Tax Laws (Amendment) Bill, 2012” in the National Assembly to provide a mechanism for bringing potential taxpayers into tax net and to enforce compliance to the tax laws by giving a one-time opportunity to the unregistered persons and non-filers to regularise their tax affairs by launching tax amnesty scheme. 

The government also introduced three other bills “The Constitution (Twenty-third Amendment) Bill, 2012, The Electricity (Amendment) Bill, 2012 and The Criminal Law (Amendment) Bill, 2012 in the National Assembly. The Speaker referred these bills to concerned Standing committees of the House for further deliberations. 

The National Assembly also passed “The Trade Development Authority of Pakistan Bill, 2012 with a small amendment proposed by opposition party Pakistan Muslim League-Nawaz (PML-N) to maximise exports of goods and services and to develop strategy and plans within the policy framework.

Finance Minister Dr Abdul Hafeez Shaikh introduced “The Tax laws (Amendment) Bill, 2012” to launch tax amnesty scheme to widen the tax base and jack up tax-to-GDP ratio. The other three bills were moved by Law Minister Farooq H. Naek.

The Tax Laws (Amendment) Bill, 2012 also seeks to amend the Income Tax Ordinance, 2001, Sales Tax Act, 1999 and Federal Excise Act, 2005 to provide an effective alternative dispute resolution mechanism to settle the protracted legal disputes. It also seeks to give an over riding effect to the relevant provisions over the provisions of the National Accountability Ordinance 1984 and Foreign Exchange Ordinance, 2002 in respect of voluntary declaration initiatives made under section 120A and 120B of Income Tax Ordinance 2001.  

The main clauses of the Bill are as follow. 

2. In the Custom Act, 1969 in section 195-C of sub-section (4), the following shall be substituted, namely:-

“(4) The Board shall, within forty-five days of the receipt of the recommendations of the Committee, pass ‘an order accepting the recommendations or rejecting the same after recording the reasons thereof in the aforesaid order.”

3. (b)      for sub-section (4), the following shall he substituted, namely: -

“(4) The Board shall, within forty-five days of the receipt of the recommendations of the Committee, pass an order accepting the recommendations or rejecting the same after recording the reasons thereof in the aforesaid order.”

4. Amendment of Ordinance, XLlX of 2001. In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely.

(b)   in section 120A, after sub-section (3) the    following new sub-sections shall be inserted, namely:

“(3A) For the purposes of execution and implementation of a scheme under this section besides income Tax authorities, National Database and Registration Authority (NADRA) and banks shall also be authorized to,-

(a) accept declaration;

(b)  accept registration tax;

(c) issue receipts; and

(d) issue NTN,

in accordance with the said scheme.

(3B) Notwithstanding anything contained in the National Accountability Ordinance, 1999 (XVIII of 1999), the Federal Investigation Agency Act, 1974 (VIII of 1974), the Foreign Exchange Regulation Act, 1947 (V of 1947) and the Companies Ordinance, 1984 (XLV1I of 1984) the Board may, in national interest, grant immunity to the person declaring undisclosed income from the effect of the aforesaid laws. No such immunity shall be granted where the person declaring undisclosed income is involved in any offence under the Control of Narcotic Substance Act, 1997 (XXV of 1947) and the Anti-terrorism Act, 1997 (XXVII of 1997)”

(c) after section 120A, the following new section shall be inserted, namely:

“120B. Registration tax. (1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, the Board may make a scheme of registration, on payment of registration tax, in respect of registered and un-registered non-filers.

(2) Where any person being an individual opts to regularise his income tax affairs vide the scheme, made under sub-section (1), he shall be required to pay registration tax as may be prescribed under the aforesaid scheme.

(3) Where a person has paid registration tax in accordance with the scheme, he shall not be liable to,—

(a) file any return for any previous tax year; and

(b) pay any further tax, charge, levy, penalty or be subject to prosecution or any proceeding in respect of declaration made under the scheme subject to sub-sections (3) and (4).

(4)  For the purposes of execution and implementation of a scheme under this section besides Income Tax authorities, National Database and Registration Authority (NADRA) and banks shall be authorised to accept,-

(a)  accept declaration;

(b)  accept registration tax

(c) issue receipts; and

(d)  issue NTN,

in accordance with the said scheme.

(5) Notwithstanding anything contained in the National Accountability Ordinance, 1999 (XVIII of 1999), the Federal Investigation Agency Act, 1974 ( VIII of 1974), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the Companies Ordinance, 1984 (XLVII of 1984) the Board may, in national interest, grant immunity to the person declaring undisclosed income from the effect of the aforesaid laws. No such immunity shall be granted where the person declaring undisclosed, income is involved in any offence under the Control of Narcotic Substance Act, 1997 (XXV of 1997) and the Antiterrorism Act, 1997 (XXVII of 1997).

(6) Any claim for tax already paid, collected or deducted under the Ordinance, shall not be admissible unless regular return of income is filed by the taxpayer and in such case provisions of the scheme shall not apply.

(7) Any person who does not opt to pay the registration tax required to be paid under the scheme’ made under sub-section (1), shall be liable to finalisation of provisional assessment under section 122C and all the provisions of Ordinance shall apply accordingly. During the pendency of proceedings under section 122C and the resultant recovery proceedings the person shall, notwithstanding anything contained in any other law, be liable to suspension of his CNIC, placement of his name on the Exit Control List (ECL), freezing of his, bank accounts and blocking of his mobile phone SIMs after being provided an opportunity of being heard.

(8) For the purposes of this section, -

(ii) “registered non-filer”  means any person who has been allotted an NTN and.

(a) has not filed a return of income for three tax years out of any five completed tax years;

(b) has never filed a return of income or

(c) has filed a return of income for any of the tax year prior to five completed tax years; and

(iii) “unregistered non-filer” means an individual who does not have an NTN or has never filed a return of income;

(d) in section 134A- (ii) for the sub-section (4), the following shall be substituted, namely:-

“(4) The Board shall, within forty-five days of the receipt of the recommendations of the Committee, pass an order accepting the recommendations or rejecting the same after recording the reasons thereof in the aforesaid order.”; and

(e) in section 216, in sub-section (3)   

“(s) to National Database and Registration Authority (NADRA) for the purposes of implementing any scheme made by the Board  under sections, 120A and 120B.”.

5. Amendment of Federal Excise Act, 2005.- In the Federal Excise Act, 2005, in section 38,-

(b) for the sub-section (4), the following shall be substituted,

“(4) The Board shall, within forty-five days of the receipt of the recommendations of the committee, pass an order accepting the recommendations or rejecting the same after recording the reasons thereof in the aforesaid order”.

According to “The Constitution (Twenty-third Amendment) Bill, 2012, minority’s seats would be increased from 10 to 14 in the National Assembly, 8 to 10 in Punjab Assembly, 9 to 12 in Sindh Assembly and 3 to 4 in Khyber Pakhtunkhwa and Balochistan assemblies respectively.

Similarly, through Electricity (Amendment) Bill 2012, section 24 of Electricity Act 1910 has been amended whereby ‘notice’ provision has been included and failure to pay the outstanding dues as specified in the demand notice by the consumer will result in disconnection of supply of electricity. Moreover, section 36 has been amended such that the appointment of electrical inspector under the Electricity Act 1910 has been entrusted to the federal government and provincial government if so authorised by the federal government.