Chairman Federal Board of Revenue Shabbar Zaidi has ruled out possibility of any political involvement or interference behind the ongoing strikes or protests against the condition of providing computerised national identity card (CNIC) numbers of unregistered buyers or imposition of 17 percent sales tax on local sales of five export-oriented sectors.
Responding to a query whether the tax issues are being politicised, the FBR Chairman during a press conference here on Friday said that the tax issues are not being politicised. There is no political hand in such strikes, he added. The FBR chairman said that detailed negotiations have been held with businessmen and traders to address their concerns. He said there is no deadlock in negotiations with any of the association or trade bodies.
To a number of queries, he categorically stated that the FBR has not imposed any kind of tax on wheat flour. Zaidi said that there is no deadlock with anyone and FBR has constantly been engaged with exporters associations including All Pakistan Textile Mills Association (APTMA), chambers, trade bodies and associations in all cities including Karachi, Faisalabad, Lahore and Islamabad. The FBR is separately engaged with the Lahore Traders Alliance. The FBR has also met four different trade bodies and every association claims to be the lead body of traders.
Zaidi told media, "We will not compromise on SRO 1125 and CNIC issue, but we are in continuous dialogue with the textile sector. We are ready to hear textile sector's viewpoint on duties and tax remission for export (DTRE) scheme related issues, early payment of refunds and providing level playing field against imported yarn.
The ongoing meetings of the FBR officials with export associations are mainly focused on two key issues ie. SRO 1125 and condition of CNIC of un-registered buyers. In this regard, the FBR has held a detailed meeting with the APTMA. The processing industry within the textile chain has its own issues. Both the decisions of imposition of the 17 percent sales tax on export sectors and condition of seeking CNIC number of un-registered buyers cannot be withdrawn, Zaidi said.
The Prime Minister has also met with the officials of Karachi chamber to discuss the issues including CNIC's of un-registered buyers.
He regretted that some sectors are using the condition of seeking CNIC's number of buyers to create misunderstanding and confusion for their own motives. The condition of the CNIC is not for the general public, but only for persons registered with the sales tax department.
There is no justification behind the strike of traders, and the Board would not back out from the condition of seeking CNIC numbers of buyers above Rs 50,000 transactions. There was undue criticism and propaganda over the CNIC issue which came under consideration in the talks with traders and businessmen of Karachi.
As a result of meetings with the chambers/trade bodies, the FBR chairman said that the FBR is ready to define 'small trader' in consultation with the trade bodies. The FBR is also ready to introduce a fixed tax scheme for small traders.
The FBR chairman said certain unscrupulous elements are using the condition of the CNIC for achieving their own objectives. Referring to an example of the mobile phone importers at Karachi, he said that the importers have requested to clear 400 seized mobile phones on payment of penalty.
Similarly, there is no justification behind increase in prices of wheat flour when no tax is imposed on wheat. The FBR has asked the district administrations and secretary agriculture to deal with the profiteers in wheat sector, he said.
He said the condition of providing the CNIC numbers is only applicable in the sales tax regime. There are 47,000 sales tax registered persons and sales tax can only be recovered by the sales tax registered persons. The condition of the CNIC is not applicable in the income tax law and it is only related to the sales tax issues.
The FBR will gradually move towards a complete shift on automation and reduce the human involvement in the system, claimed Zaidi. The FBR will automate all processes including seeking exemption certificates on imports, fixed tax schemes and automation in sales tax registrations.
The FBR Member IT has said that the process of thumb impression from NADRA for sales tax registration has been started, he said. Talking about the large scale transfers and appointments of the FBR officials, Zaidi said it was done in accordance with the law. About the ongoing documentation drive, Zaidi said that it is his personal viewpoint that the homework has not been properly done during the documentation drives in the past. "We have electronic data of taxpayers including NADRA data and data from other sources," he said.
The FBR will enforce filing of income tax returns from persons liable to file returns under section 114 of the Income Tax Ordinance 2001. He added that the owner a motor vehicle having engine capacity above 1000 CC and owner of immovable property with a land area of 250 square yards or more are required to file returns under section 114 of the Income Tax Ordinance 2001.
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