New tax scheme or FBR’s pipedream
APROPOS of the report ‘New scheme to net 3.20 million tax-evaders’ (Jan 6), the FBR chairman, while explaining the Tax Amnesty Scheme (TAS) Bill before the Senate Standing Committee, stated that the TAS would play a ‘gold mine’ for future taxation.
He claimed that after the TAS bill was passed and came into force the number of taxpayers would increase from 805,465 to 4.0 million. What magic wand is in the bill which makes the recalcitrant tax thieves into compliant taxpayers overnight is, however, anybody’s guess.
A major segment of the national economy is undocumented as a large number of persons who are required to file their income tax returns are persistent non- filers and are depriving the national exchequer of its due share.
The FBR, through this scheme, is expecting to bring to the tax net such type of thugs by providing them an opportunity to whiten their amassed income/assets through paying a token amount to cover their undeclared income/assets up to Rs5 million.
According to TAS, after due date tax evaders would face major penalties like placement of their names on the Exit Control List and cancellation of their passports or CNICs or seizure of their bank accounts.
Now the question is when the government has decided to impose major penalties on tax-dodgers, why then go for such a faulty and absurd scheme instead of going straightaway against the white- collar tax criminals and recover more than what is expected of TAS. This would send a message to other tax evaders and force them to submit to the tax laws.
Unfortunately, in our country no lesson is ever learnt from history. If the past is any guide, TAS schemes announced by previous governments in 1999- 2000 and 2007- 08 not only yielded a paltry revenue from taxpayers but no concomitant punitive action was taken against those who did not disclose their assets and offered black tax.
So, both the scheme had proved to be utter failure. The FBR chairman, who is a non- technical man from the taxation point of view, had no statistics to substantiate his claim. Thus his declaration before the Senate Standing Committee could only be considered his self- delusion.
The TAS bill 2012 if passed in the present shape would only make the country a laughing stock as only a few tax evaders would pay some tax. According to previous experiences, nothing substantial could be expected of this scheme as well. I, therefore, suggest that in the case of TAS’s failure to achieve the desired targeted goal, it is the FBR chairman and his team, advocating such an awful scheme, who should have to take the brunt.
M. A. DEEPLAI