Immunity must be granted across the board under investment amnesty scheme: KTBA

KARACHI: The Karachi Tax Bar Association (KTBA) on Friday suggested to the Chairman of Federal Board of Revenue (FBR) Tariq Bajwa that immunity must be granted across the board under amnesty scheme for investment to broaden the tax net, a notification said.
The KTBA meeting was held to discuss the issues arising from the SRO 1065(i)/2013 of amnesty scheme under which comprehensive immunity has been allowed on investments and for non filers of tax returns.
The Association clarified that the SRO, under provision of Section 111 of Income Tax Ordinance,2001 provides amnesty for investments made in a Greenfield Industrial undertaking. As per Bar understanding that there is no requirement for investment in any particular area in Pakistan so they would be eligible for benefit of the amnesty.
According to the Bar, “Investment in Greenfield Industrial Undertaking means a new investment locally or through foreign direct investment in all type of industrial undertaking whether newly setup or existing unit anywhere in Pakistan.”
As per notification, the form of tax returns for tax years 2008 to 2012, the SRO said that no tax credit is available to persons who avail this amnesty. The Bar said, “However, there will be cases where a person may have derived income partly falling under NTR and partly under FTR or persons who only derived income that is covered under FTR on which tax has already been collected but have not filed tax returns.”
The KTBA believes that the scheme to non filers is to broaden the tax net. Therefore, “it is strongly recommended that such persons may also be permitted to claim tax credit and file tax returns and avail the amnesty this will help in brining such people in the tax net and increase the number of tax return filers.”
The concession has been given in investment made in sectors including: construction industry in corporate sector, low cost housing construction in the corporate sector, livestock development projects in the corporate sector, new captive power plants, mining and quarrying in Thar coal, Balochistan, and Khyber Pakhtunkhwa.
In discussion the office bearers explained regarding immunity to a minimum benchmark of business capital from applicability of Section 111 with an example, “If a prospective person is conducting medium size business requiring minimum capital of 10 to 20 million rupees. If he files his return under this scheme for the last five years, generating equivalent amount of capital would require such persons to pay tax at least 2.5 to 5.0 million.”
Whereas in the present schemes, if someone who files return for the last five years, would not be able to generate any significant capital. In this regard it is noted that the SRO slashed the first tax slab for tax year 2012 from 7.5 percent to 5 percent. The Bar suggested, “A reasonable amount of progressive tax rebate may be announced for all the years against each tax slab for those taxpayers who pay the tax more than 20, 000 or 25, 000 rupees, whichever the category they fall.”
The KTBA said that to encourage persons having turnover of five million, amnesty should be given against action under sales tax and federal excise duty laws as well.
It further added that immunity must be granted across the board under all the fiscal laws to make this scheme workable.

Bookmark the permalink.

Comments are closed.