Tarin defends tax arrest clause but promises improvement
ISLAMABAD: Finance Minister Shaukat Tarin categorically rejected on Friday the Senate’s request to abolish the powers given to the Federal Board of Revenue (FBR) in the 2021 budget bill to arrest non-paying people, saying that ” people around the world are arrested for not paying taxes ”. but assured the Senate that the article 203A inserted in the ordinance of the income tax of 2001 would be “absolutely reformed”.
“This clause was inserted as a deterrent, it is not that they [FBR] officials would just come in and stop [tax defaulters] – but we should have that capacity, ”said Tarin in his closing speech in the Senate. President Sadiq Sanjrani chaired the session.
“In relation to this arrest case, we have, so far, received 15 million taxpayer profiles – their electricity bills, their phone bills, their bank accounts and all that – if the profile of a taxpayer indicates that he has to pay taxes, the FBR does not prosecute them because FBR would force them to harass them (into paying taxes). We seek the participation of third parties or relevant organizations of traders, traders, doctors, bankers – who would convince them to pay taxes – but even then, if they don’t, this clause was inserted as a deterrent, “he said. The Standing Senate Committee on Finance , Revenue and Economic Affairs recommended abolishing the proposal that grants RBF officials the power to arrest non-taxpayers and recommended deleting Section 203A in the Tax Ordinance. 2001 income in the bill 2021 recommendation, the Minister of Finance said: “Section 203 would be completely reformed. We’re going to do it in a way that is satisfactory to everyone because it’s become a really big deal… I’m not a professional FBR guy, so people should have little confidence in me… ”
Making it clear that the proposal to give the RBF the power to arrest non-taxpayers would not be removed from the 2021 budget bill, Tarin addressed former Senate Speaker Raza Rabbani of the Pakistan People’s Party. (PPP) and said: “Raza Rabbani sahib you know… it’s happening all over the world; people are being arrested all over the world for not paying taxes… so let that deterrent be there… but by wielding such power [like arresting non-taxpayers] would follow a very high level control and due process… ”
The Minister of Finance mentioned the names of some foreign personalities arrested for tax matters, including Leona Helmsley, Lester Piggot and Peter Graf.
“(1) An officer of the Inland Revenue having the rank of Deputy Commissioner of the Inland Revenue or any other officer of equal rank authorized by the Council for that purpose, who, on the basis of material evidence, has reason to believe that a person has committed an offense of concealment of income or any offense warranting prosecution under this Ordinance, may result in the arrest of that person ”, states Article 203A.
The Minister of Finance assured the Senate that the National Assembly treasury benches “would try to accept” his recommendations on the 2021 finance bill.
Tarin said the International Monetary Fund (IMF) wants to impose new taxes of 700 billion rupees, including 150 billion rupees in income tax, on Pakistanis. “But I stood up to them and opposed it,” he said.
He said the proposed sales tax on food products in the federal budget had been removed and the proposed tax on machinery was under review.
The government is taking action to bring an additional 15 million people into the tax net, he said.
Meanwhile, 18 bills – 17 from the government and one from private members – were tabled in the Senate on Friday and were referred to the relevant standing committees. The government bills were: National Commission for Vocational and Technical Training (Amendment) Bill 2021, Hyderabad Institute for Technical and Management Science Bill 2021, Draft National Arts Institute Act 2021, Pakistan Academy of Letters (Amendment) Bill 2021, Agricultural, Commercial and Industrial Loans (Amendment) Bill 2021, Bill Financial Institutions (Secure Transactions) Bill 2021 (Amendment), SBP Banking Services Corporation Bill 2021 (Amendment), Companies Bill 2021 (Amendment), The Corporate Restructuring Companies (Amendment) Bill Law 2021, Bill 2021 on the Center for Impact Studies on Global Change (Amendment), Bill 2021 on the Protection of Minority Communal Property (Amendment), Bill 2021 on Registration, r Regulation and Facilitation of Charities in the Capital Territory of Islamabad, The COVID-19 (Prevention of Hoarding) Bill 2021, The Port Qasim Authority (Amendment) Bill 2021, The Pakistan National Shipping Corporation (Amendment) Bill 2021, The G Wadar Port Authority (Amendment) Bill 2021 and The Maritime Security Agency (Amendment) Bill 2021. Mustafa Nawaz Khokhar of PPP introduced his private member’s bill: Al-Karam International Institute Bill 2021. Earlier, the House a prayed for the martyred soldiers of the Border Corps in Sibi. Later, speaking in the House, Federal Minister of Railways Azam Khan Swati said the government would fully support an investigation into the death of former Senator Usman Khan Kakar. The Senate session was prorogued.
Copyright Business Recorder, 2021