Around 35% return filers declare zero income: Tarin

Staff Reporter BOL News

20th Sep, 2021. 06:51 pm
CPEC ushers in new era of economic prosperity Tarin

KARACHI: Around 35 per cent of the total return filers declare zero income, a senior government official said on Monday.

According to a statement issued by the Karachi Chamber of Commerce and Industry (KCCI), Federal Finance and Revenue Minister Shaukat Tarin met the business community on Sunday to discuss the Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated on September 15, 2021 through a presidential order.

Tarin categorically said that victimisation was definitely not the purpose of the ordinance, which was purely for non-filers and those under-filers who file zero tax.

“It was a matter of concern that of a total of 2.9 million filers, one million are those who file tax returns and show zero taxable income,” the statement quoted the finance minister, as saying.

“We are intending to take help from artificial intelligence and would examine electricity, gas, telephone bills along with [the] banking transaction activities and other details of such filers and classify them as under-filers who will be asked to submit their taxes through a third party,” the finance minister added.

Tarin assured the business community of releasing the drawback of local taxes and levies (DLTL) on a priority basis, adding that DLTL has been extended and it will not be discontinued, while the business community is going to get all its claim on time, as the funds for the purpose had already been allocated in the budget and the pending DLTL claims of Rs32 billion of the last fiscal year will also be settled in the next six months.

He advised the Karachi Chamber of Commerce and Industry (KCCI) to visit Islamabad to discuss their reservations about the new ordinance, besides resolving all the issues on the spot by arranging meetings with Prime Minister Imran Khan, Adviser to the Prime Minister on Commerce and Investment Razak Dawood, Federal Minister for Energy Hammad Azhar and Federal Minister for Industries and Production Makhdoom Khusro Bakhtyar.

“We will instantly give deadlines for all the pending policies, as [the] PM [prime minister] is determined to revive business, industrial and agricultural activities,” he added.

Businessmen Group chairman and former president of the KCCI Zubair Motiwala, BMG vice chairmen Tahir Khaliq, Haroon Farooki and Jawed Bilwani, general secretary A Q Khalil, KCCI president Shariq Vohra, senior vice president Saqib Goodluck, vice president Shamsul Islam Khan, former vice president Muhammad Idrees, former presidents, KCCI Managing Committee members along with the prominent business figures attended the meeting.

Tarin said that the government was serious towards resolving issues to ensure sustainable economic growth at the rate of 5 per cent, which was the basic reason for enhancing the Public Sector Development Programme (PSDP) and reducing the prices of raw materials so that the industry could stand on its feet.

“Good news is that we are growing, as all the indicators are showing improvements and we are growing faster than what was being expected,” he said, adding: “However, the import bill is going to touch $19 billion this year, compared with $13 billion last year, mainly due to [the] rising petroleum prices and other commodities, which we have to absorb.”

The finance minister also said the government’s target was to improve the pace of exports from the existing eight per cent to 18 per cent in the next few years, while the narrow industrial base was also being expanded through incentivisation.

Incentives have been given to the construction, pharmaceutical sectors and spare parts manufacturers. “Anyone with [the] economy of scale production is being incentivised to enable them to go for exports, as well. We have to improve exports and FDI [foreign direct investment] by facilitating the local investors through [the] Board of Investment. If our local investors will not be happy, how are we going to attract foreign investors.”

Tarin said that inflation was not the issue of Pakistan alone, as many countries around the world, including regional countries, were also facing this issue, which was due to the disruption in production all around the world due to the Covid pandemic along with logistics disruptions and exorbitant container chargers.

“[The] prices of palm oil, wheat and rice have been rising globally since 2018. We cannot isolate ourselves from international commodities prices, as we are linked with them.”

He also assured to convey the KCCI’s concerns over the dilapidated state of Karachi’s infrastructure to the prime minister with a request to come up with some kind of a direct action by the federal government to improve the poor state of Karachi’s infrastructure.

Motiwala expressed concerns over the newly-promulgated ordinance in which enforcement measures have been introduced in the name of broadening the tax base and said that this ordinance has frightened everyone, mainly because of the term under-filer, which was pinching in everyone’s mind and needs to be removed.

It was highly unfair that instead of appreciating and pampering the filers and acting strictly against the non-filers, this ordinance targets the existing filers too by tagging them as under-filers, which would open up more avenues of harassment and corruption. Hence, the term under-filer has to be expunged from the ordinance.

Underscoring the need to take everyone into the tax net, he said, any income being derived from this country, which crosses the benchmark set by the government should attract tax whether it was agriculture, industry or trading.

“We are patriotic citizens and we would like to see Pakistan growing and tax collection at optimum level so that development takes place across the country,” Motiwala said.

“Keeping in view all the expenditures, we really need at least a minimum tax collection of Rs12,000 billion but for that purpose, you will have to look where the funds were being lost instead of looking for them everywhere,” he said, adding that the ordinance was being considered as victimisation for being in the tax net, as the Federal Board of Revenue (FBR), which has all the details of the filers would go for the easiest way by acting against filers instead of hunting for non-filers.

“Before devising such laws, all the stakeholders should have been consulted and taken onboard.”

Motiwala also said that DLTL has not been extended, as no extension notice has been issued since July 1, 2021 and the exporters have no idea whether DLTL was there or not.

“Although DLTL claims worth Rs32 billion have been cleared by [the] FBR and sent to the State Bank, as well, the amount has not been released as yet,” he added.

Highlighting the issues of Karachi, he said the premier announced an ambitious Karachi Transformation Plan (KTP) of Rs11,000 billion but nobody knows when it was going to come on ground and what was the progress so far.

The representatives of the business community, who know exactly where the development works were needed in industrial areas, were also not being consulted in the transformation plan for Karachi.

“The design of K-IV project, which is the lifeline for Karachi, has been changed 11 times that resulted in escalating the cost of this project from Rs22 billion to more than Rs100 billion, which was also a very serious issue.”

He said although Pakistan’s ranking in the World Bank’s Doing Business Index has improved to 108th but it was still too high because the business community has not been provided a level-playing field.

“Within Pakistan, we don’t have an even-playing field, as Karachi was expensive, compared with the cost of doing business in Punjab and other areas. Although the government extended RLNG at $6.5/MMBTU and electricity at 9 cents/unit to five zero-rated sectors, the RLNG relief has not been given to industries in Karachi who just started receiving electricity at 9 cents after a gap of two-and-a-half months.”

He appreciated Finance Minister Tarin for allowing trade in rupees with Afghanistan but the State Bank has not issued a relevant notification, in this regard, and the trade with Afghanistan has gone down 60 per cent.

KCCI president Shariq Vohra welcomed the finance minister and appreciated the strategies adopted by the government that led to consolidating the economy with a GDP growth of 4.8 per cent, whereas consistency was visible in the exports and the large-scale manufacturing was also performing well, creating a much comfortable situation not only for the government but also for the private sector.

Highlighting the KCCI’s macro-scopical perspective, he said there had always been a mismatch in exports against imports, as the exports remain stagnant in between $22 to $25 billion and the imports keep rising.

The depreciating rupee value was also neither supporting the exports nor the businesses and the economy, which can only be saved when the government devises effective strategies for enhancing the meager industrial base of the country and also creates an environment in which the industrial units could have surplus production.

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