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Tax amnesty scheme

Tax amnesty scheme

The government’s effort to bring one million potential taxpayers into the tax net is meeting a cold response as a majority of them is not willing to come under the tax net on easy terms. Only four days are left in the deadline for the non-filers to take benefits of the scheme without a visible improvement in tax collections and the authorities are weighing options to take next move after March 15. On another note, the Federal Board of Revenue is hopeful of achievingthe tax collection target of Rs 3,104 billion and has already collected Rs1,814 billion during the first eight months (July-February) of the current fiscal year.The board has to achieve a balance of Rs291 billion in March to meet a condition of the International Monetary Fund for the third quarter of the fiscal year. The fund had set Rs2,105 billion revenue collection target for July-March of the fiscal year.

So far nearly two and half thousands of the non-filers have availed the tax amnesty scheme and deposited about Rs220 million in the government exchequer. Finance Minister Ishaq Dar has already extended the deadline for scheme up to March 15, but the move could not restore the confidence of the business community in the tax scheme. The failure of the government to add one million new taxpayers into the tax net is a point to ponder for the officials to revisit the policy matters and remove flaws in the tax collection campaign. There are businessmen who will never be in favour of becoming part of the taxpayers’ community but there are others who are ready to fulfill their national obligations. The government will have to assure law-abiding taxpayers that there will be no coercion and pressure in the assessment of their taxable income.

Meanwhile, the government has increased the rate of withholding tax on banking transactions from 0.3 percent to 0.4 percent to push the business community to come in to the tax net. But this will be easy for the tax evaders to stay away from the authorities by only paying a meagre amount on their bank transactions. The government collected Rs 13.2 billion by charging 0.3 percent on bank transactions during the first seven months of the fiscal year. This move is harmful for the banking sector as the people have started applying other means of money transactions, avoiding to involve banks in the business. Unless the government opts for capacity building of the government officials and purge the government departments of black sheep, the policies such as the tax amnesty would continue to meet utter failures.