IT will be a matter of satisfaction for people of Pakistan that despite challenges in tax collection, the Government has vowed not to go for a mini budget. An assurance to this effect has come from Chairman Federal Board of Revenue (FBR) Rashid Mehmood Lagrial who asserted in an interview that it is wrong to raise tax rates or impose new taxes, adding that the right way was to secure taxes at the existing rates from those who are not paying full and due taxes. He said the FBR undertook analysis of tax measures and came to the conclusion that the tax rates hike did not achieve the desired results. There is no space available for further increasing the rates in taxes and it is not the wish of the government to do so but he cannot predict that how things will play out in future.
This change in the thinking of the top policy-makers augurs well for the existing tax-payers, who have become weary of the traditional approaches of the tax collection as their incomes are squeezing and those who do not pay full and due taxes are getting scot free. The plan explained by the Chairman shows his remarks were not mere slogans but backed by a comprehensive strategy to force non-filers or under-filers to contribute their due share to the national kitty. He noted that there was under filing of Rs. 1.2 trillion by top one percent earners of income in the country and instead of resorting to a mini budget the shortfall in tax collection would be met by top one per cent earners. If the sale of any business exceeds the limit of Rs100 million but he does not get his business registered, his premises will be sealed. If he does not get himself registered, a receiver will be appointed to attach property and freeze bank accounts.
The FBR has proposed amendments that only Assan accounts should be allowed to those who would not be on the active taxpayers list and all these account holders could operate up to Rs1 million only. But the current and savings accounts could be operated by the filers only. Similarly, only filers will be able to purchase property and that too commensurate with the income and resources as declared by them in the income tax returns. The last wealth statement filed by the filers will be matched to show his eligibility and worth. Apart from restriction on purchase of property for non-filers, they will also not be allowed to purchase vehicles or invest in securities or mutual funds. The figures quoted by the FBR chief confirm the widely held belief that there will be no need to impose new taxes or increase the rate of the existing ones if optimum potential of income and sales taxes is realized through a combination of measures. The income tax liability of top one per cent earners is estimated at Rs. 1.7 trillion but Rs. 0.5 trillion was paid by only 0.2 million filers from this segment of the society and the remaining potential of Rs. 1.2 trillion is evaded by under-filers and non-filers. The FBR was facing difficulties in pursuing cases of under-filing and non-filing despite availability of a huge amount of data through multiple sources because of capacity issues. Now the institution is hiring about 1500 auditors and hopefully the situation would improve when the process starts for their induction in January, 2025. A significant increase in tax collection has become a necessity to get rid of foreign loans that come with strings attached and therefore, it is the responsibility of all citizens to pay their due taxes to help realize the objective of breaking the begging bowl and make Pakistan truly sovereign.
