Islamabad: The federal government has decided to tighten the noose around those who make transactions worth more than their declared income.
According to details, a meeting of the Standing Committee on Finance of the National Assembly was held yesterday under the chairmanship of the committee’s chairman, Member of National Assembly Naveed Qamar.
In the meeting, the Chairman FBR said that it has been decided to tighten the noose around those who make transactions worth more than their declared income.
The FBR will seek the services of banks for this purpose. The Chairman FBR said that the data of taxpayers’ income and turnover will be shared with banks, the data will be shared with banks on the basis of identity card, and the banks will report if the transaction volume of the concerned person does not match the FBR data.
He further said that it will be mandatory to report on transactions worth more than the income declared in the wealth statement or tax return, banks will be asked not to stop the transaction but the report should be provided to the FBR.
Sales tax will be imposed on services in the federal capital. Tax has not been increased on vehicles up to 800 cc, while Naveed Qamar said how can investment in the stock market be banned.
Even students make small investments in the stock market, on which the Chairman FBR said that the committee should guide us, people will declare their assets and purchase property, however, they will have to provide details of the assets.
Mirza Ikhtiar Baig said that some matters in business are settled in cash, daily cash transactions of one or two crore rupees are normal, doing so will create problems for the business.
Naveed Qamar said that the FBR should not scare people and let them come into the system, while Minister of State for Finance Ali Pervez Malik said that the government, coalition parties and the opposition are in agreement on increasing tax collection. Mirza Ikhtiar Baig said that strict measures can lead to capital transfer abroad.
Committee member Nafisa Shah said that if the existing tax laws are implemented properly, tax collection will increase. Giving more powers to the FBR will increase capital transfer abroad.
Meanwhile, in a major relief to the real estate sector, the National Assembly’s Standing Committee on Finance yesterday deferred the approval of a legal amendment until the new budget, which proposed to ban the purchase of properties without clearly disclosing the source of purchase of assets.
Transactions like buying assets, cars or investing in the stock market can now be done without disclosing the source of purchase.
The National Assembly Standing Committee, headed by PPP’s Syed Naveed Qamar, approved the report of its subcommittee, which recommended that “the proposed new Section 114C be deferred until the final changes are made in the Federal Board’s online system and necessary changes are made in the Revenue Board’s online system.”
The government had introduced a bill in the National Assembly to amend the tax laws, which banned economic transactions by non-filers who do not have sufficient financial resources to purchase property.
Bilal Kayani, convener of the subcommittee, said that according to the proposed legal amendment, a person cannot purchase property unless the assets disclosed in his last year’s tax returns are sufficient for the purchase or the person files a new return to disclose the means of purchasing the property.
The FBR has not yet developed a real-time secure technical solution where the buyer is required to file a declaration.
“We feel that Section 114C should not be approved by the Standing Committee until technical changes are made and its correctness and effectiveness are demonstrated to the Committee,” the committee, while approving the sub-committee report, adjourned the matter till June.
Bilal Kayani said that the FBR has not taken any action despite having complete data of its transactions. People are filing tax returns only for property transactions and the FBR seems content to collect additional tax instead of going after them for not paying full tax on the actual income.
PPP MNA Nafisa Shah said that 114C is a completely flawed law. Lower middle income group and first time buyers of any property should also be exempted from prior inquiry.
