Senators For Not Withdrawing Ban On Non-filers To Purchase Property, Vehicles

Members of the Senate's Standing Committee on Finance and Revenue on Monday raised objections over the omission of Section 227C of Income Tax Ordinance from Finance Bill 2018, proposing not to withdraw ban on purchase of property and vehicles by non tax filers.

ISLAMABAD, (UrduPoint / Pakistan Point News - 24th Sep, 2018 ) :Members of the Senate's Standing Committee on Finance and Revenue on Monday raised objections over the omission of Section 227C of Income Tax Ordinance from Finance Bill 2018, proposing not to withdraw ban on purchase of property and vehicles by non tax filers.

They viewed that the section should have been better amended as the move would discourage the existing tax filers and encourage evasion of taxes.

Farooq H Naik, while chairing a committee meeting here, observed that exemptions should be given to the non-tax filers for purchasing vehicles of up to 800cc or property worth up to Rs 5 million.

Taking part in the discussion over Finance (Amendment) Bill, 2018, he said the non filers, who got property through inheritance, and the overseas Pakistanis should also be exempted from filing tax returns.

Minister of State for Revenue Hammad Azhar said in the presence of right to purchase property by all the citizens, there were some restrictions to continue ban on the purchase of vehicles and property by non-filers.

He said the government was committed to broaden the tax net and it was considering to target the well-off people for the purpose. "A proposal is under consideration that no industrialist will be provided electricity connection by the WAPDA until he or she enters tax net." Senators Musadik Malik, Haroon Khan, Mian Muhammad Ateeq, and Talha Mehmood also expressed their reservations against the proposal and recommended to find out a workable solution in that regard.

Member Inland Revenue of Federal board of Revenue (FBR), Dr Muhammad Iqbal, opined that the restriction of the non-filers would reduce sale and purchase of vehicles and property leading to low revenue collection.

With regard to increasing taxes on highly paid individuals, the committee proposed to reduce the income tax rate on cumulative annual salary of up to Rs 4 million from proposed 20 percent to 15 percent, on Rs 4 to 5 million from proposed 25 percent to 20 percent and over Rs 5 million from 29 percent to 25 percent.

Earlier, the minister of state for revenue informed the committee that the government took corrective measures in the budget 2018-19 to make it balanced one.

"The previous government had failed to bring structural reforms in economy and showed 'criminal negligence' in presenting correct facts and figures in the Finance Bill 2018 and that is why the new government has to present an amended budget," he said.

Hammad said the country's fiscal deficit had surged to Rs 2,230 billion, which could rise to Rs 2,800 billion by end of the current fiscal year if corrective measures were not taken.

He said in the Finance (Amendment) Bill 2018, the government had proposed maximum relief to the businessmen to increase the exports which would ultimately help in reducing current account deficit that had crossed $18 billion.

The minister said the government did not believe in the debt-based growth. "We are following a three-step plan of stabilization-recoveries-growth," he added.

Hammad Azhar said over 200 textiles mills, which were non-functional, needed to be revived by providing maximum reliefs. If those mills became operational, exports could be increased by billions of Dollars, besides creation of thousands of jobs.

Haroon Khan, however, claimed that the government had not taken any solid measures to boost the exports.

"The country's main problem is current account deficit and the government should take concrete steps to raise the exports," he added.