ISLAMABAD: The National Assembly on Tuesday unanimously adopted a resolution to reduce the indirect taxes burden on the masses, impose direct taxes and widen the tax net by bringing into it the evaders.
Members from across the isle supported the resolution of Asad Umar for imposition of direct taxes to mitigate their load on the poor masses and reforming the system to stop leakage.
Moving the resolution in the House, Asad Umar said, “It is responsibility of the government to end exploitation of the poor as it has been enshrined in the Constitution of which we have taken an oath.”
He said according to the Federal Bureau of Revenue data, there were three million tax evaders in the country and there was a need for introducing reforms in the upcoming budget to end exploitation.
“Article (3) of the Constitution explains to end exploitation from the society. Therefore, the government should move forward with an agenda of direct taxation,” he added.
Speaking on the resolution, Qaiser Ahmed Sheikh underlined the need for promoting tax culture in the country and widen the tax net. At present the tax collection ratio was worrisome and the tax system directly affected the poor.
Syed Asif Hasnain said tax evasion had become “our culture”. The affluent people looked for new methods to evade taxes. “Why cannot we introduce a proper taxation system, when we have a clear guidance in the Islamic injunctions?” he asked.
He proposed to nab just 10 tax evaders and see that on the next day 10,000 others would be standing in queues to pay taxes. “This is the fault of system, that makes people evade taxes and we have great hopes from the present government to overhaul the taxation system.”
Javed Hashmi said Pakistan had become a tax free zone and there was nobody to nab the tax evaders. “Let us start it from the Parliament. The elected members should judiciously pay their taxes and set an example.”
He urged to collect taxes from the rich and spend on the poor to ameliorate their lot and end their miseries. “Today we have billionaires in the country, but tax payment ratio is very low. People often remain busy in seeking ways to avoid tax payment.”
Shazia Marri said the government should avoid indirect taxes in upcoming budget as those directly affected the poor.
She pleaded to document the economy and bring every eligible person into the tax net to minimize dearness burden on the poor Pakistanis.
Shah Mahmood Qureshi stressed to address corrupt taxation system as the targets set by the FBR were not usually met. “This is a reason behind this menace. We know the disease and also know the remedy, then why cannot we address the problem?” he asked
He also mentioned that the problem was lack of political will. Over the years, the governments could not exhibit the political will and the gap kept expanding forcing the country to opt for IMF programmes.
“To secure our sovereignty, we shall have to nab the corrupt. It is time to think whether we shall be able to stand on our feet and provide relief to the poor,” he added.
Sher Akbar Khan, Abdul Rasheed Godel, Maulana Ameer Zaman and Abdul Sattar Bachani called for a system of checks and balances and reforming the FBR. “If the FBR officials will be involved in corruption, tax collection cannot be improved.”
The members stressed on installing small power projects to meet energy needs and improve performance of industrial sector and exports to earn foreign exchange for mitigating the deficit. They also demanded legislation to maintain statistics of earning and punish the tax evaders.
Winding up the discussion on the resolution, Parliamentary Secretary for Finance and Revenue Rana Muhammad Afzal Khan agreed with the members about reducing burden of indirect taxes and said during last 14 years, the tax collection ratio had declined to 8% from 13% of gross domestic product (GDP) in 1999. “This negligence of years has badly affected the tax regime and become a serious challenge for our government.”
He said to widen the tax net, the government had issued notices to 77,000 people, while 5,500 orders had been given to trace those, who had not appeared before the tax officers. “We are tracking them through their CNICs (computerized national identity cards) and if anybody remains unfounded, we shall cancel his / her CNICs.”
He said a Tax Advisory Council had been constituted with businessmen and industrialists as its members to improve the system. Expanding tax net by just one percent of GDP would bring in Rs 230 billion more. With increased tax collection, more money would be available for development. Therefore, the government was diligently moving forward to increase tax to GDP ratio.
Rana Afzal said due to the government’s initiatives, China had committed $ 32 billion investment over next five years. “Our revenue collection is increasing, we are moving towards energy sufficiency and rupee is getting stable against dollar.”
He hoped to increase the tax collection during next years and also review the subsidies system. But, he added, “we cannot bring a revolution overnight. We had started with 8.5% fiscal deficit. But, now we are heading towards reforms and shall nab the tax evaders.”
He agreed with the speakers about amnesty and said,”We should not give amnesty to any sector. But, when we move in this direction, flight of capital increases that disturbs rupee vs dollar exchange rate.”
The Parliamentary Secretary underlined the need for incentives to the industrial investment, saying international financial institutions had praised the government initiatives. “We have reduced our foreign tax burden by six percent,” he added.
He said describing the agricultural sector as a non-tax sector was a false perception as agriculturists pay tax in many kinds.