LAHORE: The revenue collection can be enhanced by 1,000 percent provided the Federal Board of Revenue (FBR) rationalise policies and reduce tax rates. To broaden tax net and increase tax-to-GDP-ratio, registration of Sales Tax Number (STN) and National Tax Number (NTN) should be made simpler besides reducing the tax rate.
This was stated by Lahore Tax Bar Association (LTBA) former President Habibur Rehman Zuberi while exclusively talking with Customs Today.
“The LTBA has been protecting rights of the tax advisers, educating them on various tax-related issues besides educating the common taxpayers since 1947,” Mr Zuberi highlighted. He said that the bar organised seminars and programmes for the capacity-building of members and enlightened them upon new SROs, circulars and policies.
The LTBA president informed that the Bar had been rendering its invaluable input to the government on various tax-related issues through pre and post-budget seminars, adding that the Bar always strived to ensure good liaison with all the organisations concerned including the Federal Board of Revenue, Punjab Revenue Authority, chambers and industrialists.
He claimed that the Bar had become an important stakeholder in the tax matters, adding that however, for the past sometime ‘it appeared’ the Bar’s role had been marginalised. Mr Zuberi informed, “We, thus, took up the issue with the FBR Chairman and members and urged them to take all stakeholders on board to get through all the policies”.
Citing example of the Customs, he said that people had confronted with immense problems due to a lack of coordination among stakeholders, especially since the introduction of queue system in the Customs.
“If any objection raises to documents, which, otherwise, comply with the queue system of WeBoC, have to be queued up again, making the businessmen to face extreme hardships,” he averred.
He claimed that cases were also delayed due to unavailability of alternative officer for the one who proceeded on leave due to some natural reason.
Similarly on assessment side, if there is any objection to imported goods, the importers are asked to deposit the assessed amount on the promise to be paid back if the case is decided in favour him/them.
However, it seldom happens as importers have to wait for years to get back their hard-earned money from the department. Then junior officer who does not know properly about the law and procedures is made chairman of the appellate tribunals which is also one of the major hurdles in deciding cases on time,” the LTBA chief detailed.
To a question about sales tax refund, he said that there were a large number of companies which had not been paid their sales tax refund since long. “The refund amount of most of these companies has exceeded their paid up capital. But the FBR is still not ready to pay back their legitimate refund,” the LTBA former president regretted.
He claimed that ST refunds were being paid back only when one approached the Federal Tax Ombudsman.
About tax net broadening, Zuberi said that registration of sales tax and national tax number (NTN) were one of the major obstacles to the efforts for enhancing tax revenues. “Pral and central registration officer (CRO) needed immediate attention of the government to expedite work on registration of sales tax number (STN) and NTN, adding that the FBR should organise programme to create awareness and educate the public about tax issues.
“If we want to broaden tax net and increase tax-to-GDP-ratio we must make the registration system as simpler as all over the world including our neighbouring countries India, Bangladesh, China and Sir Lanka,” he emphasised.
Zuberi pointed out that It was a common practice that when a new taxpayer apply for registration he had to wait for several months with unrealistic objections which only discourage new taxpayers, forcing them to work in the name of a fake company and smuggle goods.
“We need to reduce tax rates to broaden tax net by bring in new taxpayers but unfortunately the system has become so obsolete that it does not accommodate new taxpayers while the existing ones are being taxed unfairly, force them to opt for tax evasion”, Zuberi concluded.