New registration scheme: tax avoiders to face major penalties

New Tax Payers Registration Scheme:

Tax avoiders to face major penalties

The names of potential taxpayers'' will be placed on Exit Control List (ECL) and their Computerised National Identity Cards (CNIC) to be cancelled, if they failed to register themselves with the Federal Board of Revenue (FBR) under the new registration scheme.
Member FBR Asrar Rauf informed the Public Accounts Committee (PAC) on Thursday that the FBR would present the new tax policy for approval in the parliament soon. "The potential taxpayers will face major penalties like placement of their names on the Exit Control List (ECL), cancellation of CNIC if they failed to register themselves under the new tax scheme within three months", he said.
The meeting was presided over by PAC Chairman Nadeem Afzal Chand and attended by Khawaja Muhammad Asif, Riaz Fatyana, Sardar Hayat Sadiq, Khurram Dastgir, Abid Sher Ali, Noor Alam Khan, Hamid Yar Hiraj, Ali Musa Gilani, senior officials of FBR, Auditor General of Pakistan (AGP), representatives of National Bank of Pakistan (NBP), Security and Exchange Commission of Pakistan (SECP) and Pakistan Medical and Dental Council (PMDC).

Asrar Rauf said that it is not tax amnesty scheme but it is a Tax Registration Enforcement Initiative under which potential taxpayers will be asked to comply with tax laws, get national tax numbers and start paying taxes by filing returns. The taxpayers will deposit about Rs 40,000 to get registered under the scheme. In the scheme, 3.1 million people will be targeted who have been identified with the help of database of the National Database and Registration Authority (Nadra).
He said that the FBR expected the scheme to generate revenue worth Rs 1020 billion. Last year, the FBR had recovered Rs 1883 billion and added that such type of tax schemes were being practised in America, Spain and Israel. "I am not convinced that the new scheme will play any role in bringing potential taxpayers into the tax net, but it will help in whitening the black money earned through drug smuggling, kidnapping for ransom and other illegal means", said Sardar Hayat Sadiq.
He said that if the FIR has identified 3.1 million taxpayers then why notices are not being issued to them. On this, Asrar Rauf said that the FBR would issue notice to them if the potential taxpayers failed to get register themselves within three months under the new scheme. Nadeem Afzal Chand directed the FBR to produce the list of media houses, Information technology companies and government departments who are not paying tax for the last 10 years to the committee within one week. The PAC asked questions to NBP officials that why they filed a petition in court against the
audit of NBP. The AGP officials said that AGP could not start audit of NBP as the matter is sub judice. Khawaja Asif said that if correct audit of NBP was conducted the bank will collapse "Why NBP moved to court against the Ministry of Finance as they are hiding their corruption", he said.
The committee took stern notice of absence of president NBP in the committee. The NBP officials told that he was engaged in pleading some case before the Federal Investigation Agency (FIA). PAC chairman said was FIA more important or parliament. Chairman PAC Nadeem Afzal Chand said that no department is above the law and has to be audited. It could audit any department where the government had invested in any manner, he said. He directed President NBP to hold a meeting with secretary Ministry of Finance in this regard. He also ordered to call secretary finance, president NBP and official of law ministry in the next meeting.
The meeting also directed officials of Security Exchange Commission of Pakistan (SECP) and Pakistan Medical and Dental Council (PMDC) to give access to auditor general toconduct audit of these departments. The PAC constituted a committee comprising officials from Ministry of Finance and Law Division to look into the matter of refusal by different entities for their audit by AGP.
The PAC decided that the committee will summon the entities within a week to hear their stance and present its report thereof to PAC. Nadeem Afzal Chand said that the PAC would file reference in the National Assembly against those departments, which do not allow audit. The committee also issued directives to issue notices to other organisation which refused to allow AGP to audit their accounts.
Audit officials informed the committee that FBR was not co-operating, to which PAC Chairman Nadeem Afzal directed the FBR officials to complete their work regarding audit objections and provide record Auditor General within nine days in the form of report. " If the FBR failed to provide record within nine days he would take up this matter with the prime minister and will asked the AGPR to stop salaries of FBR officials", he said. Riaz Fatiana proposed that only letters of displeasure to departments not co-operating with audit officials are not enough but a copy of displeasure letters be sent to establishment division and prime minister secretariat besides, pasting one copy in the service book of respective officer so that his promotion case could be decided in the light of this letter.