Accounting, Business

Repatriation of funds by expats: FBR asked to come up with amnesty scheme proposal

National Assembly Standing Committee on Finance has asked the Federal Board of Revenue (FBR) to come up with a proposal of a new amnesty scheme to be offered to Pakistanis, including resident citizens, for repatriation of their fund and assets from abroad.

During a meeting of the finance committee presided over by Qaiser Ahmed Sheikh here on Tuesday, the members of the ruling party stated that there is a growing demand for a tax amnesty scheme from the business community. Ruling party’s member Mian Abdul Mannan stated that Prime Minister Nawaz Sharif has agreed to the demand of business community and directed Finance Minister Ishaq Dar to work on it. The chairman of the committee asked the FBR to give a proposal while business community would also be asked for a proposal to be offered to the Pakistanis for repatriation of their wealth/assets and fund to Pakistan. During discussion on FBR audit policy, the members of the ruling party strongly criticised their own government’s tax polices and stated that audit policy is harassment for business community.

Asad Umar of Pakistan Tehreek-e-Insaf said tax amnesty schemes have been responsible for the low tax to GDP ratio in the country because these give wrong message to tax payers. The chairman of the committee stated, “Your audit policy is creating problems and such policies are decreasing tax files. At one time tax filers were 1.5 million but the number is on decline primarily due to such policies.” “People do not want to become filers because they have to go through the audit and face other problems such as section 40B which is imposed to meet the revenue shortfall,” remarked another member of the ruling party. The committee members said that tax officials discourage tax payers from coming into the system.

The committee asked questioned from the FBR officials as what is being done about Pakistan Revenue Automation Limited (PRAL) software. The members of the committee stated that PRAL software is very useful for the FBR and sought comprehensive details on the project.

The chairman FBR said there were some problems with respect to PRAL software and now the project is in the process with the help of World Bank (WB). He said that decline in tax to GDP ratio was due to self-assessment scheme introduced in 2000. He said audit of tax payers has been started after a period of eight years.

Asad Umar said there is need of a separate statutory body on audit of tax payers because there is a clear conflict of interest when it is dealt by the FBR whose responsibility is to generate revenue. The FBR even seeks advance tax from state-owned enterprises (SOEs) by June 30 to achieve the revenue target.

While briefing the committee on audit, an official of FBR stated that under new audit policy for the year 2016, the audit was conducted through six list parameters and 93,000 people were selected from 1.2 million filers. This was a paradigm shift from the previous policy of random selection for audit.

The approach will minimise chances of selection of compliant tax payers resulting in increased confidence in the system. This new trend in taxpayer’s audit will not only promote compliance with the existing tax laws but will also generate increased revenues through better declarations for better public spending by the government.

Earlier, the committee approved the development budget of Finance Division, Revenue Division and Statistics Division for the next fiscal year. The meeting was informed by Secretary Finance Tariq Bajwa that Finance Division has requested Rs 4 billion for seven project with four ongoing and three new ones while Revenue Division has proposed allocation of Rs 14 billion for 41 ongoing and new projects and Pakistan Bureau of Statistics (PBS) has sought allocation of Rs 100 million for one project.

The committee was also presented a report by Mian Mannan on evaluation of property rates by the FBR in different cities and it was decided that FBR and committee would sit together to devise a policy to be considered in budget for the next fiscal year to do away with the anomalies in this regard. Asif Bajwa gave a briefing to the committee in preparation of population census.

Copyright Business Recorder, 2017