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Proposal to bring professionals under tax net - LahoreEstate - 01-30-2009 10:18 AM
ISLAMABAD, Jan 29: The Senate Standing Committee on Finance has directed the Federal Board of Revenue (FBR) to tax professionals like doctors, lawyers, customs agents, chartered accountants and others.
The committee, headed by its Chairman Senator Ahmad Ali, here on Thursday proposed that the income of such professionals should not be exempted from sales tax.
Reviewing the progress of FBR, especially in areas of enhancement of tax base and achievement of tax collection, Mr Ali said the FBR should also fix a reasonable rate of GST on professional’s income, just like other service providers.
He expressed concern over low collection of income tax from private businessmen and practitioners. He was of the view that most of the professionals and businessmen do not show their correct income level in the tax returns, which leads to massive tax-evasion.
He suggested to the FBR to make it a legal obligation for private practitioners in various services to conduct annual audit of their income from any registered audit firms.
The professionals should be bound to provide audit certificates while filing annual tax returns, he added.
Similarly, the committee also directed the FBR to bring all types of retail businesses into the tax net.
There were jewellers, large departmental stores, cloth merchants and hundreds of other kinds of businesses which needed to be brought into the tax net, the chairman said.
The committee members also highlighted the low contribution of taxes from the agriculture sector.
“Though the agriculture tax is a provincial subject, the FBR can assist them to improve the tax collection procedures,” committee member Senator Ishaq Dar said.
The committee also pointed out that real-estate sector was the least tax contributor area despite having huge potential.
The chairman inquired as to how the FBR incorporated legal amendments other than the financial matters in the financial bill. He was referring to the increase in judges’ strength in Supreme Court through the Finance Bill 2008.
FBR chairman Ahmad Waqar informed the committee that the board had done this on the instructions of federal government. However, Mr Ali directed the FBR that in future such amendments should not be incorporated in the Finance Bill.
Earlier, the FBR chairman briefed the committee on tax collection achievements during the first half of the current fiscal year.
The FBR chairman said that the IMF had also estimated that the GDP growth would remain slow as compared to previous years. Therefore, he said, revised tax collection target of Rs1.3 trillion was challenging due to the current economic slump.
He said FBR has collected Rs547 billion in the first half of current fiscal year against the assigned target of Rs580 billion, showing a shortfall of Rs33 billion.
Providing the breakdown of tax collection, he said, the FBR collected Rs205 billion income taxes, Rs52 billion of federal excise duty and Rs72 billions in a head of customs duty collections.
To a query, the FBR chairman said during the first half, FBR collected Rs12 billion taxes from petroleum products, while it was Rs7.2 billion during the same period last year, thus indicating a negative growth of 72 per cent.
Tax collection from the corporate sector was Rs9 billion, 20 per cent less as compared to last year’s collection during the same period, and the revenue from the palm oil import also decreased to 7.2 billion from Rs8.4 billion, showing a negative growth of 14 per cent, he added.
http://dawn.com/2009/01/30/ebr7.htm