Rationalization of tax system may yield Rs2300 b – FTO

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Enewspaper.com.pk
Enewspaper.com.pk

KARACHI (PR): Pakistan can collect revenue to the tune of Rs2300 billion if the tax system rationalized, this was stated by Federal tax Ombudsman (FTO) Dr Muhammad Shoib Suddle. Speaking at a luncheon meeting at Korangi Association of Trade and Industry (KATI) on Tuesday, the FTO said that attaining 13.8 per cent tax to GDP ratio is only possible when the colonial system of taxation would be changed otherwise revised tax to GDP ratio of 8 per cent may not be achieved. “We are still in the hangover of colonial system that’s why we are far behind the rest of the world in tax collection”, Suddle said adding that if the tax system would be reformed, an additional revenue to the tune of Rs800 billion could be generated and the country would not require any foreign aid or Kerry Lugar Bill. Shoib said that after handling the case of missing containers by FTO, the definition of smuggling has been changed. He informed that the volume of smuggling through Afghanistan bound containers has been reduced to 40 per cent only and only 4,000 out of 10,000 containers are being misappropriated and that too could be eliminated after the system’s reforms. He added that exchequer is now earning Rs1 billion per month against duty from these containers. He informed that about 25,000 cases decided by the FTO are pending for refunds due to the flawed system. He said that if the decisions of the cases were not implemented the respondents would be issued contempt notices. He said that FTO office receives as many as 1,500 applications annually and the period of disposal of the cases has been reduced to only 60 days which is a record. He said that almost 85 per cent of decided cases were in favour of the applicants while in rest of the world the situation is otherwise. He said that it shows the level of maladministration in our system. “We have achieved the milestone of clearing all backlog of the previous cases”, Shoib said adding that the volume of refund and pother claims by the tax payers has reached to the tune of Rs144 billion. Replying to the President All Karachi Industrial Alliance, Mian Zahid Hussain, he said that FTO office has advised the FBR not to seize accounts of the tax payers unilaterally and without giving prior notice to the tax payers. He further said that issue of harassment by the tax department to the tax payers would also be addressed. Shoib said that he would consider taking one of KATI’s members into Advisory Council of FTO. He invited KATI’s chairman and Mian Zahid Hussain to hold meeting once a month. FPCCI’s Chairman Standing Committee on Sales Tax, Mian Zahid Hussain said in his address that FTO office is doing a commendable job to provide relief to the aggrieved tax payers. He has drawn the attention of FTO towards harassment by the tax department by issuing notices without giving chance of hearing to the tax payers. He requested the FTO to also take notice of lodging FIRs against tax payers by the FBR without any system or criteria. He said that harassment to the tax payers is creating panic among the tax payers and this situation would encourage them to get away with tax net. He asked the FTO to appoint a monitoring committee which should monitor the system of FBR or appoint someone from KATI as member Advisory Committee FTO. The Chairman KATI Ehtesham Uddin in his welcome address said that over 80 per cent cases decided by the FTO showed that Pakistan’s tax system is not working properly and the tax payers are being harassed instead of being encouraged. He said that FTO is playing a vital role in providing relief to the tax payers.