Pay taxes as charity not enough: FBR chairman

[Shahzaz ud din]

Pay taxes as charity not enough: FBR chairman
Tahir SheraniUpdated July 19, 2019
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FBR Chairman Shabbar Zaidi addressing a symposium in Islamabad on Friday, July 19. — Photo provided by author
Federal Bureau of Revenue (FBR) Chairman Shabbar Zaidi on Friday called on the nation to pay taxes as "giving zakat, charity money and donations is simply not enough".

The remarks came as he addressed a symposium in Islamabad, titled 'Pakistan Economy and IMF Programme: Challenges and Opportunities' organised by the Sustainable Development Policy Institute (SDPI).

"I have endured enormous pressure over the past two weeks. I meet 13-14 delegations every day with whom I hold discussions."

"Everyone says the same thing: 'Please stop charging all these taxes'. We must realise that simply giving zakat, charity and donations is not enough," he said, adding, "Everyone is equally liable to pay taxes."

Read more: Anatomy of a crisis

The chairman also asked why such a big deal was being made over the National Identity Card (NIC) condition for shopping worth Rs50,000 or more.

"Everyone is raising a hue and cry over the requirement of showing the NIC for purchases over Rs50,000. Even beggars have identity cards [these days]. What is the problem in showing your identity card?" he asked.

Talking about the economic situation, he said Pakistan has transformed itself into a trading country from a semi-manufacturing country.

"We are importing everything from chocolate to mineral water to shoes. The previous year imports stood at $51 billion, whereas exports stood at $21bn. No country can function like this," he said.

Examine: Why don’t we pay taxes?

Quelling the fears of exporters, he said that taxes have only been imposed on local trade of goods and not on the export sector.

He regretted the proliferation of hawala and hundi businesses.

"No questions were ever asked when it came to remittances coming in from abroad which led to the mushrooming of hawala and hundi businesses," he remarked.

'IMF not in Pakistan to cash in on profit'
International Monetary Fund's country representative to Pakistan Maria Teresa Daban Sanchez, while addressing the symposium said that some misconceptions regarding the Fund were found to be prevalent in Pakistan.

"The IMF does not give Pakistan a loan package with the objective of earning a profit," she said, contradicting a popular opinion held by many critics.

"The IMF provides loan to member countries in the time of their need," she added.

Maria Teresa Daban Sanchez addressing the symposium.


She recounted that Pakistan had approached the IMF 18 times and that debt repayment was a big issue in the country, with 25 per cent of revenues being spent on loan payments. She noted that Pakistan has very low revenue collection figures compared to other countries.

She did, however, say that it was a welcoming sign to see that the current account deficit has reduced.

Explore: Reading the IMF programme

Sanchez further observed that the tax exemptions accorded to individuals are far greater than they should be. The IMF representative also noted that Pakistan spends only 1pc on the education and 2pc on health.

She said that the tax to GDP ratio is between 10pc and 12pc — which in other countries is 15-16pc. She strongly urged Pakistan to prioritise spending in social development.

The IMF official cautioned that Pakistan will have to step up efforts in implementing the FATF conditions. Sanchez also said that within the next three years, Pakistan will have to reduce its debt-to-GDP ratio from 80pc to 60pc.

'Would have negotiated a bigger package'
Former State Bank of Pakistan governor Dr Shamshad Akhtar while delivering her address remarked that the government had been late in procuring the IMF package and that a lesser amount had been obtained with the same conditions attached.

Dr Shamshad Akhtar addressing the symposium.


"If I had negotiated, I would have asked for a bigger package," she added.

Take a look: The last IMF loan?

She said that the past government had kept the dollar rate low and made exports cheaper that way. "Artificially keeping the dollar rate low was not a wise move."

"The State Bank had been advised to raise the dollar prices. Keeping the dollar controlled is dangerous for the economy."

She also highlighted the need for institutional reforms to be brought in alongside economic reforms.

 

[El Sidd]

PM Khan says Pakistanis are most charitable people.

Shabbar can Audit the Parliaments tax returns and do a press conference otherwise he should be taxed for wasting time doing photo ops.

#ShabbarKiTankhaCut

 

[Syed1.]

PM Khan says Pakistanis are most charitable people.

Shabbar can Audit the Parliaments tax returns and do a press conference otherwise he should be taxed for wasting time doing photo ops.

#ShabbarKiTankhaCut

You should be taxed per post so that we are spared your rubbish across the forum.

 

[guest9999]

I'm liking this Shabbar Zaidi guy, his bluntness in implementing economic documentation is really hardcore. If people are kicking, screaming, throwing a fit, it can only mean you are doing something right.

 

[El Sidd]

I'm liking this Shabbar Zaidi guy, his bluntness in implementing economic documentation is really hardcore. If people are kicking, screaming, throwing a fit, it can only mean you are doing something right.

Darwnism wont help you.

The poor of the Nation has taken a hit. All in the Name of Sadiq and Ameen.

There is little room for error for these high stakes first time ruling parties

 

[Shahzaz ud din]

FBR to take punitive action against under-invoicing, misdeclaration
Tahir SheraniJuly 18, 2019
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The FBR chairman urges traders to refrain from dealing in smuggled goods. — DawnNewsTV / File
The Federal Board of Revenue (FBR) on Thursday warned the business community against under-invoicing or misdeclaration of imported goods.

The board in a statement said that otherwise, the FBR will take punitive action against those involved.

Take a look: Naeemul Haque says Shabbar Zaidi not being changed as FBR chairman

According to the statement, FBR Chairman Syed Shabbar Zaidi conveyed a message to the business community that besides refraining from smuggling goods, they should not indulge in under-invoicing or other misdeclarations when getting their imported goods cleared at ports.

"Any importers, their clearing agents and the delinquent staff found involved in such practices shall be liable to punitive action under the law," read the statement.

The FBR chairman further urged the traders to refrain from dealing in smuggled goods and categorically stated that "whosoever is found involved in any way dealing with the sale, purchase or storage of the same will be dealt with strictly".

The FBR statement read that the country has been facing the problem of securing its economic borders as rampant smuggling not only entails huge revenue losses but also adversely impacts the existing industry and future investment.

"Prime Minister Imran Khan has taken a very serious notice of the situation and has ordered a number of measures to cleanse the society from the menace of smuggling."

Meanwhile, Zaidi wrote a letter to all director generals and members of the board to end the prevailing uncertainty among officials over large scale transfers within the board.

According to the letter, there is a tradition of transfers in the FBR, particularly at senior levels, at the beginning of each financial year. He, however, made it clear that the tradition would not be made a norm.

He asked all officers to focus on the recovery of revenues.

 

[guest9999]

Darwnism wont help you.

The poor of the Nation has taken a hit. All in the Name of Sadiq and Ameen.

There is little room for error for these high stakes first time ruling parties

How many people in this country are sadiq and ameen? FBR's breakdown of filers and non-filers will tell you a lot. Almost every Pakistani considers himself to be "ghareeb awam".

As for Darwinism, I will have more sympathy when people stop cheating, deceiving, lying, stealing, practicing nepotism, corruption, and eating haraam.

 

[El Sidd]

How many people in this country are sadiq and ameen? FBR's breakdown of filers and non-filers will tell you a lot. Almost every Pakistani considers himself to be "ghareeb awam".

What is your Definition of Poor? i only take numbers published by Government.

i am not talking about living off inheritance video games playing manchilds or Anime watching confused youth.

An average Pakistan is likely to be poorer even by GoP indicators.

 

[VCheng]

"If I had negotiated, I would have asked for a bigger package," she added.

Madam, it is not the size of the package that is important, but what one does with it.

 

[war&peace]

Tax is the duty and state should take it with it full might while charity is optional

 

[blueazure]

the economic collapse of pakistan is under full swing under the guise of mr shabbar zaidi.

the man ran a tax cheat agency under the guise of an audit firm and counselled businesses how to avoid taxes ( not that i agree with the idea of taxation in the first place ) .


some facts for the PTI trolls crying 'taxes taxes' above -


1. GDP growth slowest in decades

2. stock mkt plunging daily

3. FDI falling

4. rising inflation and rate hikes ( aka giving pain killers to a cancer patient) is killing the economic activity


----------------


can any PTI wala tell me what is the 5 year plan for revive the economy ?


-----------------

i can confirm this sans any bias , the ordinary middle class is getting fed up with inflation . sentiment is reversing.

 

[Shahzaz ud din]

Fair taxation system imperative to make Pakistan an equitable society’
By
APP
-
July 19, 2019
1
168

• Shabbar Zaidi says policies of previous govts made Pakistan a trading state instead of a semi-manufacturing state

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Shabbar Zaidi said on Friday that the government remains focused on the expansion of the tax base, as it is necessary for the documentation of the economy.

“Taxation is the only way forward for equitable distribution of wealth, as we cannot have a stabilized and equitable society unless we have a fair taxation system,” he said during a policy symposium on “Pakistan’s Economy and IMF Programme: Challenges and Opportunities” organised by the Sustainable Development Policy Institute (SDPI).

He said the incumbent government and the International Monitory Fund are on the same page and there is no disagreement on the measures proposed by the IMF, especially with regard to taxation.

Zaidi said the government would not bow down to the pressure, protests and lame excuses of businesses and industries. “We are trying to make Pakistan good for everyone and not for (any) particular sector.”

He lambasted the previous taxation regimes for lack of prudent tax policies. “The policies of the previous governments made Pakistan a trading state instead of a semi-manufacturing state. They made the country import everything, from mineral water to foods items, and never worked-out on import substitution,” he added.

While raising concerns over the open transit trade agreement with Afghanistan, he said the agreement is being exploited and abused by the smugglers and that it is negatively impacting the local industry.

“Pakistan needs to review this agreement and should take stringent measures to control the illicit trade on Pak-Afghan border,” he maintained.

Shabbar Zaidi said there are around 100,000 companies registered with the government, but only 60,000 file their returns. “This highlights the level of tax compliance in Pakistan.”

The FBR chairman claimed that the measures taken in the current federal budget would fundamentally change the course of Pakistan’s history.

“The government is taking appropriate measures to redress institutional corruption through automation of the taxation system,” he added.

Speaking on the occasion, former finance minister Dr Shamshad Akhtar said stabilization of the economy is crucial for the country’s growth.

She said the country and its people would have to endure this tough economic period in order to see the light of the day, as there is “no gain without pain”.

“After the introduction of key structural reforms across the board, the economy will come out of the prevalent crisis,” she added.

Dr Shamshad Akhtar noted that major economic challenge of the country included high consumption, low production and low savings and investments, adding that the gap is widening between saving and investments, which is pushing the country to seek foreign assistance.

While talking on IMF programme, she said IMF polices are usually dynamic which may help Pakistan address fiscal imbalances.

IMF Resident Representative for Pakistan Maria Teresa Daban Sanchez said the $6 billion Extended Fund Facility (EFF) for Pakistan aims to support the economic reform programme of the country.

She said the programme focused on decisive fiscal consolidation to reduce public debt and build resilience, besides expanding social spending.

The programme will help Pakistan reduce economic vulnerabilities and generate sustainable and balanced growth, she added.

Moreover, she said the programme is expected to unlock broader support from multilateral and bilateral creditors in excess of $38 billion, which is crucial for Pakistan to meet its large financing needs in the coming years.

SDPI Executive Director Dr Abid Qaiyum Suleri said at the very beginning, there was lack ownership from the government on the IMF programme, which made the programme controversial.

He said the letter of intent of the current government to IMF focused on expanding social safety nets to cushion the impact of the needed stabilization policies on the poor, which is a positive step.

However, the government needed to strengthen its social protection programmes and should focus on direct taxation to help reduce the burden on the vulnerable segment of the society, he added.

the economic collapse of pakistan is under full swing under the guise of mr shabbar zaidi.

the man ran a tax cheat agency under the guise of an audit firm and counselled businesses how to avoid taxes ( not that i agree with the idea of taxation in the first place ) .


some facts for the PTI trolls crying 'taxes taxes' above -


1. GDP growth slowest in decades

2. stock mkt plunging daily

3. FDI falling

4. rising inflation and rate hikes ( aka giving pain killers to a cancer patient) is killing the economic activity


----------------


can any PTI wala tell me what is the 5 year plan for revive the economy ?


-----------------

i can confirm this sans any bias , the ordinary middle class is getting fed up with inflation . sentiment is reversing.

FBR’s revenues to surge to Rs10.5tr by 2023-24: IMF
By
APP
-
July 15, 2019
1
1010

—‘Rapid growth of tax revenues will be ensured through policy measures committed by Pakistani authorities’

ISLAMABAD: The International Monetary Fund (IMF) has projected that the revenues of the Federal Board of Revenue (FBR) would increase to Rs10.5 trillion by the year 2023-24.

In its recently published staff report on Pakistan, the IMF projected that the FBR is likely to collect around Rs5.5 trillion during the current fiscal year, which would increase to Rs7.001 trillion in next year, while in 2021-2022, the revenues would reach to Rs8.3 trillion, and Rs9.48 billion in the subsequent year.

As per the IMF, the overall revenues of the country will most likely surge to Rs7.165 trillion in 2019-20, followed by Rs8.9 trillion in 2020-21, Rs10.6 trillion in 2021-22, Rs12.12 trillion in 2022-23, and Rs13.37 billion in 2023-24.

The report said that the rapid growth of tax revenues in the coming years would be ensured by the policy measures committed by the Pakistani authorities.

“With less than 1.5 million taxpayers filing tax returns and tax compliance generally very low, tax policy and tax administration measures will centre on broadening the tax base while maintaining a low tax rate, aiming to ensure the progress of the taxation system,” it added.

The IMF stated that additional 4-5 percentage points of GDP in additional tax revenues could be achieved by the end of the programme, bringing Pakistan’s tax ratio in line with peer emerging markets.

“In the near term, measures include removing exemptions and preferential treatment to reduce distortions in the tax system and to broaden the tax base. These include the removal of GST exemptions and preferential rates, except for basic food and medicines, a measure that will significantly improve revenues,” the report added.

Greater inter-provincial harmonization and coordination of GST will also simplify filing procedures and increase compliance, the IMF report said.

“Over time, the authorities of Pakistan are committed to taking steps to transform the GST into a broad-based value-added tax (VAT) and making the personal income tax (PIT) fairer and more progressive by raising the upper-end of the PIT structure and consider eliminating PIT tax credits and deductions for the higher income brackets.

“In addition, other tax policy measures include further strengthening taxation on real estate and on agricultural turnover or income by provinces; ensuring equivalent taxation of all sources of income; and eliminating distortionary withholding taxes.”

The report stated that implementation of a full, risk-based audit framework will be facilitated by the recent reversal of legal provisions, limiting the use of tax audits. The framework will be supported by an increase in legal penalties for noncompliance.

“Moreover, licenses for the track-and-trace system for excises on cigarettes will be issued by end-September 2019 (structural benchmark), with a system rollout by end-March 2020.”

The government is also considering options to make Pakistan’s tax administration less fragmented and more business-friendly, including through the creation of a new semi-independent national tax authority to collect the main revenue sources, it added.

The IMF has projected that the pressure of current account deficit will also ease out gradually from its peak $19.9 billion in 2017-18 to as low as $6.95 billion in current fiscal year while $5.49 billion in 2020-21.

“The trade deficit would also decline to $24.9 billion in the current fiscal year, from $29.46 billion in 2018-19. However, it will further go up to $26.8 billion mainly on the back of growing import needs in the coming years.

The exports will surge to $36.7 billion by end of 2023-24 from expected $26.8 billion in 2019-20.”