Tax on cigarettes Ok, but the name ‘sin tax’ not

Published on: 06/12/2018 | Comments: 1 comment 

Chitral: The government has decided to increase tax on cigarettes, paan etc and has named the increase in such tax as ‘sin tax’.

Whereas increase of tax on cigarettes is justifiable as Pakistan has the lowest rate of tax on tobacco products, however naming the new tax as ‘sin tax’ is not in moral good standing. It is a good example of dragging religion in our worldly affairs for all the wrong reasons.

If smoking is a sin it should be discouraged in other ways. By imposing a tax on it is like legitimizing this ‘sin’ and is like saying that anybody who can afford to pay tax can go ahead with committing the sin.

This latest announcement by the government reflects the mindset which says that no matter how many sins you have committed if you recite durood sharif or certain ayats of the Holy Quran at certain particular times your 2000 or 20000 sins will be forgiven and if you perform Haj all the sins committed in your lifetime will be washed away.

We got to wake up and stop fooling ourselves. By paying tax for sin we cannot legalize the sin. If smoking is a sin stop it. If it is not stoppable then at least do not morally legitimize it by imposing a certain tax on it. Name the tax as ‘health tax’ or ‘luxury tax’ or whatever, but please do not drag religion into it. ... CN report, 06 Dec 2018

Karachi woman declares Rs 153 billion in tax amnesty scheme

Published on: 18/07/2018 | Comments: 1 comment 

KARACHI: Under the government?s tax amnesty scheme, Maryam Ali from Karachi paid more tax than anyone else until now.

According to the FBR sources, a woman Maryam Ali paid tax of 3.3 billion rupees. Maryam Ali declared the worth of her foreign assets as Rs165 billion rupees

ISLAMABAD: Tax amnesty beneficiaries have declared around Rs1.8 trillion of concealed foreign and local assets by depositing Rs97 billion in taxes to the exchequer since April, finance ministry said on Wednesday.

?Public response to the schemes has been positive,? the ministry said in a statement. ?So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs577 billion and that of domestic assets is around Rs1,192 billion.?

The finance ministry said the declarants have paid around Rs97 billion out of which around Rs36 billion have been collected on foreign assets and Rs61 billion on domestic assets. ?In addition, $40 million has been repatriated,? it said. ?This response to the amnesty schemes has been unprecedented.?

The last government announced two tax amnesty schemes, namely, Foreign Assets (Declaration and Repatriation) Ordinance, 2018 for undisclosed foreign assets and Voluntary Declaration of Domestic Assets Ordinance, 2018 for undisclosed income and domestic assets.

The original closing date for filing declarations under the amnesty schemes was June 30. It was, however, extended till July 31.

Amnesty scheme for foreign assets applies to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates range from two to five percent, depending on the type of asset.

Special tax rate of two percent is applicable to liquid assets which are repatriated into Pakistan. The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of two and five percent.

The finance ministry said the declarant information cannot be used as evidence against him as both the schemes were made part of the Finance Act 2018. Finance minister is monitoring the operation of the amnesty schemes and advising both the Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) to improve payment procedures and ensure effective facilitation.

FBR has set up help lines, which operate 24/7 with dedicated telephone lines and e-mails for quick response to queries related to the amnesty schemes. The SBP had also devised a procedure, whereby tax in dollar is deposited into SBP?s account through wire transfer for payment of tax on foreign assets.

Government issued US dollar-denominated Amnesty Rules 2018 whereby SBP has been authorised to issue the bonds having a maturity period of five years and annual profit of three percent to be paid semi-annually.

The finance ministry said revenues from the amnesty schemes will help in documentation of the economy as well as bring in onetime payment from non-declarant to officialise their assets. ?Equally critical is to support Pakistan in its endeavour to reduce poverty and uplift its population, which depends on effective prioritisation of development spending.?

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60 percent candidates either tax defaulters or out of tax net

Published on: 27/06/2018 | Comments: 1 comment 

60 percent candidates either tax defaulters or out of tax net

ISLAMABAD: Around 60 percent candidates who have submitted nomination papers for the national and the provincial assemblies are either out of tax net or have not filed tax returns, according to a source in the Federal Board of Revenue who dealt with the record of contesting candidates.

As many as 21,428 submitted nomination papers for the 2018 elections; 30% of them didn?t have the National Tax Number meaning thereby they are out of the tax net. Another 30% though have NTNs, they didn?t file tax returns.

Legally speaking, non-filers are tax defaulters. During the 2013 elections, the Lahore High Court had ordered the FBR to upload the list of candidates who are tax defaulters but it was not done.

The situation in the previous election was not much different as far as the tax compliance is concerned. A study by Basit Ali Khan, a data journalist, has found that 50% candidates were without NTNs when filed 2013 election nomination papers. And of the remaining 50% who had the NTNs, only 11% filed tax returns.

Basit examined the data of candidates that the FBR had shared with the ECP on the latter?s request. As many as 28,302 candidates had filed papers in the last elections, which are 24% more than this election. Basit analyzed the FBR responses of 20,113 candidates whose record was uploaded on the ECP website. The remaining candidates had withdrawn from the contest. In addition, there were as many as 1,164 candidates who had filed papers from more than one constituencies.

The total income of 2013 election candidates that they had declared with the FBR in 2012, the last tax year before the 2013 elections, was Rs12.71 billion and the tax paid against it Rs1.21 billion (9.59%). Again, this was the contribution of those 50% who had filed their tax returns; many of them are billionaires. Only a tax audit would determine their real worth and how true were their declarations.

An attempt by Asad Umar, former PTI MNA, to push for tax audit of the lawmakers was thwarted by previous National Assembly. A 10-member special committee was formed in 2014; half of its members had paid tax less than Rs100,000. After 9-month ?deliberations?, the committee reached the conclusion that there was no provision in the existing law for separate tax audit of lawmakers as if an amendment in the law was to be done by a forum other than the parliament.

However, in a rare display of unity, all the political parties in the parliament joined hands in 2017 to remove clauses in the nomination papers requiring them to share tax details through when the Election Act 2017 was passed in October last year.

As the Election Commission of Pakistan was authorized to design the nomination papers, it required tax details of three years preceding the election, in addition to 18 other declarations regarding loan default, citizenship, pending cases/inquiry if there is any and business details, etc, to be mentioned in nomination papers.

The parliament quietly usurped the ECP’s powers of designing the nomination papers through the Election Act 2017, deleting all above-stated declarations a candidate had to make. When the ECP objected, its officials were told that parliament was supreme and hence authorised to amend the law and the Constitution. In this case, the lawmaking was done in the personal interest of the lawmakers as it was avoided when their tax audit was demanded.

However, a dramatic reversal occurred through the intervention of the Supreme Court that directed the ECP to ask for a separate oath wherein a candidate is to declare everything deleted in the nomination papers thus ensure transparency which was attempted to be curbed.

Basit?s research found that 17% candidates for the National Assembly had filed tax returns in 2012, a year before filing nomination papers for the 2013 elections, 15% of Punjab Assembly, 11% of Sindh Assembly, six percent each of KP Assembly and Balochistan Assembly. Almost, the same percentage was noted in the case of NTN holders. In addition, he spotted as many as 572 candidates whose declared income in tax return was more than one million rupees, however, the income tax amount was zero.

The lawmakers who levy taxes on public through financial bill are averse to this practice by themselves. An investigation by this correspondent in 2011 found that 70% members of the-then National Assembly and Senate were not filers of tax returns and one in five lawmakers was without the NTN. A follow-up report determined that 50% lawmakers were non-filers and one in five was without NTN.

Taking action on that report, the former finance minister Ishaq Dar, had ordered all non-NTN holding lawmakers to register themselves for the tax and ordered the FBR to conduct force registration if they don’t volunteer. He also announced publishing two tax directories each year: one of lawmakers and one of other taxpaying citizens. Directories were published for the tax years from 2014 to 2016 and the process stopped after he left.

While this publication made Pakistan the fourth country in the world where tax data was public after Norway, Sweden and Finland, this transparency in absence of accountability noted little improvement in tax culture of Pakistan which has one of the lower tax-to-GDP ratios.

.. Source