- The FBR makes a tentative decision to abolish the category of non-filers.
- October 14 tax filing deadline will not be extended further: FBR
- “The key issues in the tax system in Pakistan are under-presented,” says Langreal.
ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langriyal said that would-be tax return filers will face music as tax machines will conflict with them for a long time, preventing them from making large transactions.
“Those who conduct large transactions will not be able to purchase properties, vehicles and manage bank accounts,” he said while speaking. Geographic News“Aaj Shahzeb Khanzada Kay Saat” program on Thursday evening.
He said that the date of next October 14 for the tax return will be the last date for submitting returns, after which the government will take the initial decision to cancel the category of non-filers. He said that non-depositors will be prevented from making major transactions.
The common man will be able to buy used plots and vehicles, but anyone involved in large transactions of new properties and vehicles will not be able to make purchases, Langreal explained.
He said there are 15 types of bans in some countries, but the Pakistani government is considering imposing a ban on some things like purchasing land plots worth more than Rs 10 million, buying a new car and freezing bank accounts.
The FBR chief added that the government may impose a ban on air travel.
Non-filing of returns is a major problem in Pakistan’s tax system, he said, adding that the government is also working to strengthen the audit capacity of tax agencies.
Langreal said that three million individuals are obligated to pay taxes, and four million families have air conditioners.
“There is a narrative that there are only 2% of people who pay their taxes. The poverty level is high, so there are fewer potential people who bear the responsibility of paying taxes,” he added.
The official further stated that there is a large group of people involved in filing incomplete returns as they are not paying their due taxes in full.
He said that the FBR analyzed the data and found that there is a company that pays 7% tax but there is another company in the same sector that pays 21% tax. He added that if two companies in the same sector pay taxes by such a large margin, then one of them is evading the taxes it owes.
In the case of the cement sector, Langreal cited an example that coal is used to produce cement but one company was found to have used coal worth Rs 3,500 per tonne but the second company claims that it costs Rs 5,000 per tonne. tons, so they can’t both be right in their claims.
A company offering a coal price of Rs 5,000 per tonne is engaging in sales suppression. He added that the level of truth was minimal in our society.
He went on to say that the FBR analyzed the entire textile chain and found many discrepancies, indicating massive tax evasion.
He added: “In the beverage sector, there is a company that shows that its sugar input is less than 3% to 4%, but there is another company that indicates that its sugar use is more than 16%.
“How can both of them prove that their claims are true,” he wondered.
Langreal said that sharing false data is a criminal act, like committing theft, adding that there is no right to any tax amnesty. He said that field officers receive very little salaries and asked the Prime Minister to ensure their transportation. He added that field formation officers receive salaries of Rs 111,000 per month.
Moreover, he noted that smuggling is also a major problem.
He said the FBR reform plan has received approval in principle but it cannot be implemented in a day or a few months. He added that procedural and legislative changes will take a few months.
In Pakistan, the Fed’s tax-to-GDP ratio could be raised to 15% along with the oil tax while the provinces could increase their tax contribution to 3% of GDP, so the country as a whole could touch the 18% mark in the total.