Govt decides to make Benami Act operational

[ahlam1399]

ISLAMABAD: After facing revenue shortfall of Rs191 billion by FBR in first seven months of the current fiscal year, the government has decided to operationalise Benami Act for seizing bank accounts and properties which will be detected on the name of others and will be sold out under the law.The FBR has now requested the government to revise downward its target but so far the annual target is enacted at Rs4,398 billion for the current fiscal year. The FBR’s provisional collection stands at Rs2060 billion against the desired target of Rs2251 billion for first seven months (July-Jan) period indicating a shortfall of Rs191 billion.“The government has taken decision to make Benami Act operational as Parliament approved the law during the tenure of last regime. We have now forwarded framed rules to Ministry of Law for vetting purposes. By making this harsh law operational soon, all those bank accounts and properties which are kept on the name of others will be seized and then tribunal will decide process of sale of confiscated bank accounts and properties under the Benami Act,” FBR’s Member Inland Revenue Service (IRS) Operation Seema Shakil and Member IRS Policy Hamid Ateeq Sarwar told journalists in a press briefing here at the Board’s headquarters on Monday.When asked about establishment of high-powered Tax Commission to consider proposals to shift GST collection on services from provinces to Centre, taxing agriculture income and placing a unified valuation rates for properties, the FBR members said that National Tax Collection Agency could provide solution. He cited examples of India, EU, USA and stated that the collection of GST on goods and services need to be harmonised. They presented examples of multinational companies where it could become hard to treat them as good or service. “The solution is to establish single tax authority,” he added. He said that the provinces objected to capital gains collection by the centre and they might take up this issue in the upcoming NFC meeting scheduled to meet tomorrow (Feb 6).To another query about jacking up valuation rates on property, he said that the valuation rate notified by FBR was still standing at 60 percent compared to the existing market rates and after hiking the valuation rate it would not affect negatively the real estate business in the country.FBR’s Member IRS Operation Seema Shakil said that the tax collection fell short of target because of incentives provided by the last regime for salaried class as the taxable limit was increased from Rs0.4 million to Rs1.2 million per annum, massive reduction in utilisation of Public Sector Development Programme (PSDP), suspension of withholding tax on mobile usage and keeping GST on POL products on lower side. She said that the GST on POL products was now brought at standard rate of 17 percent. The sales tax on POL products at import stage decreased by Rs43 billion so far.FBR’s Member IR Policy Hamid Ateeq Sarwar said that the FBR was projecting revenue loss of Rs106 billion at existing price and existing tax rate on POL products during the whole financial year 2018-19. Now the Petroleum Development Levy (PDL) was also jacked up in January 2019 on per litre basis as there was limit on upper ceiling of Rs30 per liter at the moment and there was space available to increase it.The FBR members made a point that the tax collection through withholding tax collection decreased to Rs511 billion in July-Jan period of the current fiscal compared to Rs552 billion in the same period of the last fiscal year so withholding tax declined by Rs40 billion and share of withholding tax came down.On the other hand, the tax collection went up through revenue efforts undertaken by the tax machinery as in January it witnessed 18 percent growth.Through valuation of property, the FBR’s collection stands at Rs12 billion in first 7 months of the current fiscal against same level of collection in the same period of the last financial year.They said that 10 percent collection could be generated through revenue efforts of the FBR and keeping in view track record the tax machinery could collect Rs400 billion through their efforts out of total fixed target of Rs4398 billion. The FBR utilises Rs0.67 paisa for making collection of Rs100 taxes and the share of IRS expenditure comes down to 0.30 paisa in overall collection of the FBR.The FBR possessed only 300 officers for conducting audit, he said and added that the capacity constraints were hampering the possibility to move ahead with effective audit.He said that the FBR sent out notices to 6,000 high net worth individuals and in 204 cases the FBR generated tax demands of Rs6 billion out of which so far recovered Rs2.6 billion.They said that the FBR would not harass those who availed themselves of amnesty scheme. The FBR obtained information from OECD mechanism from 26 jurisdictions but the field formation did not have information as to who availed the last amnesty scheme. When someone declared less but possessed more, he will have to explain undeclared assets before the tax authorities.The FBR officials said that there would be no discrimination against anyone under the tax laws.When asked about Aleema Khan case as to why the FBR did not initiate proceedings in accordance with predicate offense, the FBR members replied without mentioning names that in this individual case the taxpayer had deposited the tax amounts. They argued how they could enforce law with back dated effect.http://feeds.feedburner.com/~r/com/cwEr/~4/A7w7O9yBgcU

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