19th March, 2018, The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has urged the Federal Board of Revenue (FBR) to restore the audit immunity to Commercial Importers who pay advance Sales Tax @ 3% under Special Procedure for Payment of Sales Tax by Commercial Importers Rules, 2006 and income tax @ 6% under Section 148 of Income Tax Ordinance 2001 at Customs stage as full in final discharge of their tax liability.
The proposal is a part of FPCCI presentation being prepared under the Chairmanship of Syed Mazhar Ali Nasir, Senior Vice President FPCCI that would be presented to the high-ups of concerned Ministries, FBR, etc., for incorporation in the ensuing Federal Budget.
The proposal elaborated that the exemption from audit granted to the Commercial Importers vide clause 58-E(2) of the Special Procedure Rules was withdrawn a couple of years back however, FBR assured to restore the exemption and till such time alternatively would exclude commercial importers under audit policy till 2015. In the current year’s audit policy, exclusion was not extended to commercial importers from selection of their cases for audit. Resultantly field formation has started selection and issuance of notice to commercial importers under section 25 of the Sales Tax Act 1990.
The FPCCI’s Budget Advisory Council contended, “This is against the agreement made between the commercial importers and FBR and the government policy to minimize the direct contact between a tax collector and tax payer as it leads to corruption and tax evasion. The commercial importers were agreed to pay the advance tax at a higher rate just to avoid hassle, lengthy and cumbersome process of Sales Tax audit, the proposal urged. Similarly, it disclosed that the Importers working under full in final discharge of Tax liability regime under Section 148 of Income Tax Ordinance 2001 were also served with the income tax audit notices.
In another proposal, the FPCCI has also urged the government to do away with the discretionary powers given to the tax officials to raid, enter and search the taxpayers’ business premises under Income Tax Ordinance 2001 and Sales Tax Act, 1990 and termed it arm-twisting tactics of Inland Revenue officials against businessmen. It elaborated that some unscrupulous officials are harassing and oppressing business community especially the tax filers by making undue raids on their business premises. The discretionary powers given under Sections 38B and 40B of Sales Tax Act, 1990 and under Section 175(1) & (2) of Income Tax Ordinance 2001 empowers the officials to enter and Search the premises to obtain information under Section 176 of Income Tax Ordinance 2001. “It is observed that every years before end of fiscal years tax officials starts this tactics to force genuine taxpayers to make undue payment in order to meet their fiscal targets. This sort of practice is causing trust deficit among business community over revenue collection department and is one of the prime reasons for narrow tax base in Pakistan”, the proposal concluded.
(MAHER ALAM KHAN)
Secretary General (Act.)