Govt to bring tax schemes despite IMF opposition
23 October, 2012
ISLAMABAD: Pakistan would still bring tax amnesty schemes to whiten the black money by paying specific level of tax despite the strong opposition from the International Monetary Fund (IMF), as the Fund believed that government should take action against tax evaders, it was learnt on Monday.
IMF in recent concluded talks with Pakistan has raised questions about the proposed amnesty schemes being considered by the government to collect Rs 180 billion additional revenues. IMF team was of the view that government should take action against potential tax dodgers if they possess the data of about 3.8 million non-taxpayers. However, sources informed that Pakistani government at present has no other option but to bring tax amnesty schemes to generate additional revenue during the ongoing financial year. Therefore, the government is all set to announce the amnesty schemes in next few days in order to reach annual tax collection target of Rs 2,381 billion.
It might be mentioned here that government had faced massive revenue shortfall of over Rs 30 billion during the first quarter (July-September) of the ongoing financial year 2012-13, therefore without additional measures, the government is unlikely to reach annual tax collection target. Sources further informed that IMF has asked the government that honest taxpayers would be discouraged with the announcement of such amnesty schemes and the government should take action against tax dodgers if it has the data. IMF asked to improve the enforcement system of Federal Board of Revenue (FBR) and broaden tax base as such amnesty schemes are short run solutions. The government had finalised draft the Volunteer Investment Tax Scheme and Volunteer Registration Scheme with the consultation of law division. Sources were of the view that period of tax amnesty scheme might also be changed, as it might start from November instead of October and ended on January 30 instead of December 31.
These two schemes would allow such rich to legalise their hidden assets after paying particular amount of tax and get themselves register as taxpayers and government has estimated to generate Rs 180 billion in terms of tax collection within the ongoing financial year 2012-13 with the approval of amnesty schemes from the parliament.