KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged Federal Board of Revenue (FBR) to withdraw the notices issued in a large number by the officials of Audit Unit of Regional Tax Office (RTO-II) Karachi to the registered taxpayers requiring them unnecessarily to provide a plethora of specified information/Sales Tax record by the given deadline, without mentioning any specific reason or identifying fault/mistake on their part.
Zakaria Usman President FPCCI informed Chairman FBR Tariq Bajwa notices had also been issued to those commercial and industrial importers who had already discharged their tax liability in full and final by paying advance Value Added Sales Tax at import stage.
He elaborated the information sought from the registered persons in the notices was already available in the FBR data bank and had also been providing regularly by them through e-filing of their monthly Sales Tax Return and as such could be electronically retrieved through strengthened coordinated efforts amongst various wings of the FBR, instead of seeking the same manually from the taxpayers.
This is against the government policy of discouraging direct contact between a tax collector and a taxpayer as it encourages tax evasion and corruption.
That is why the cases for audit are mandatorily required to be selected only through computer random balloting to keep the process transparent and avoid misuse of discretionary powers.
The selection of cases manually at their whims and serving them with the notices, on the pretext of ascertaining the factual position, clearly reflects ulterior interest of the issuing authority, he maintained.
This was causing resentment and harassment within the trade and industry and shattering their confidence in the tax law, a prerequisite for success of any scheme.
Such measures run counter-productive to the government efforts of promoting tax culture and broadening of tax base which is evident from the fact the filing of returns was consistently decreasing and had reached to 840,000 numbers or 0.30 percent of the population, in tax year 2013 which is lowest in the region.
Similarly tax to Gross Domestic Products ratio at 9 percent is again lowest as compared to other countries in the region, he added.
This underscores the need the FBR should entice its efforts to identifying new taxpayers and bringing them in the tax net through persuasion rather than prosecution so that the existing exorbitant tax rates may be reasonably reduced as higher rates provide incentive for tax evasion in connivance with the tax officials, he concluded.
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