Majority of the salaried clAss taxpayers are of the view that the present as well as past Governments did not expand tax base but trying to squeeze further to those who are already in tax ambit. My submissions are: 1. The former Military Dictator General Musharraf tried to broaden the tax base and notified through revenue department for registration and documentation of entire business community, inclduing retailers and traders as well. Please recall that for more than 15 days all markets and business remained suspended in view of strike calls given by the various trade bodies. The dictator was determined, having an example of Bangladesh before him, to expand the tax base. However, his then Finance Manager, Mr. Shaukat Aziz advised him to surrender his action as the same is causing and will further cause decline in GDP. The General Sahib then bowed his head and the then Finance Manager of the country modified tax laws to impose fixed tax or marginal sales tax on retailers in the larger interest of the country as country could not sustain for strikes of business community, indefinitely. 2) Such provisions in Income Tax Ordinance, 2001 and more particularly in Sales Tax Act, 1990 are still operative. 3) In the year 2012 the PPP government also tried to expand the tax base and amended SRO No. 555(I)/2006. By virture of amendment in said SRO the manufacturers, importers and exporters, making taxable, dutiable or expemt supplies to unregistered persons shall issue an invoice containing the NTN No. or CNIC No. of such unregistered person. In my views the sole purpose of the amendment in SRO 555(I)/2006 was to tapped quantum of business or revenue of unregistered persons to charge appropriate tax to hem. The trade bodies did not accept the amendment and started protests and finally the Government was having no option but to withdraw the amendment in the above SRO. 3) It needs to be recalled that Finance Act, 2012 (Tenure of PPP Government) had introoduced Section 153-A in Income Tax Ordinance, 2001 whereby every manufacturer, at the time of sale to distributor, dealers and wholesalers was required to collect income tax at the rate of 0.5%. The trade did not accept this meager tax and raised its protest loudly at all business forums and had various meeting with tax management of the Country. Unfortunately, by virture of SRO 1487(I)/2012 dated 24th December 2012 the tax management deferred implementation on Section 153A till 30th June 2013. 4) Now the present governement ommitted Section 153-A vide Finance Act, 2013 and introduced Section 236G and Section 236H in the Income Tax Ordinance, 2001 by virture of introduction of Section 236G and 236H, every manufacturer or commercial importer of selected goods which are electronic, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarattes, glass, textile, beverages, paint and foam, will collect advance tax at the rate of 0.1% from distributors, dealers and wholesaler and 0.5% from the Retailers of the gross sales amount. The Government has taken very good move by amending Sales Tax Special Procedure (Withholding) Rules 2007 through SRO 505(I)/2013 by virtue of which in the event of purchase of taxable goods (sales tax) from unregistered person the buyer will withhold 17% GST out of payment to ur-registered supplier. Naturally such unregistered supplier will not agree for deduction of 17% GST and at the same time the manufacturing industry will not increase its cost by absorbing the impact of 17% GST which cannot be claimed as input sales tax, the hue and cry will strat by the trade bodies again. LET SEE WHAT WILL BE THE FINAL CONCLUSION OF SECTION 236H AND 236H AND AMENDMENT IN SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES 2007. BUT FROM MY ABOVE SUBMISSION IT MAY BE CONCLUDED THAT TAX PAYERS DID NOT WANT TO BE DOCUMENTED OR NOT WILLING TO PAY THE APPROPRIATE TAX AND AS SUCH THIS COUNTRY WILL REMAIN ON THE MERCY OF US AND US CONTROLLED FINANCIAL INSTITUTIONS. ALLAH BLESS ALL OF US AND SAVE OUR HOMELAND.
Posted on: Fri, 19 Jul 2013 10:05:56 +0000
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