Will create new tax authority if FBR cannot be fixed, PM Khan warns
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Prime Minister Imran Khan on Thursday said that reforming Federal Bureau of Revenue (FBR) is high on his agenda, but warned that if the tax collection authority cannot be fixed, he will create a new one.
"Reforming FBR is essential. Until that is done, we [the state] will not be able to meet our expenses," the prime minister said in an address to the 11th All-Pakistan Chambers President Conference in Islamabad.
"This is why we will try our best [to fix] FBR and I assure you [the business community] that I've been constantly having discussions and meetings with Abdul Razzaq Dawood and Asad Umar on how to generate revenue and make FBR a business-friendly institute.
Read: The FBR reforms the govt needs
"But I should also tell you this: if we realise that the FBR cannot be fixed, we will create a new FBR. This is because Pakistan's survival is linked to it. It's not about our liking or disliking: if our tax collection authority does not function properly, it could lead to a security risk. No nation that relies on loans can maintain its pride and independence," he said.
The prime minister urged the nation to come into the tax net, adding that in return he would guarantee that their tax would not be misspent.
"I assure you that each and every penny of Pakistanis' tax collection will be spent with great caution," he said. "We will end all unnecessary expenses. But what I want from you is to tell the people that it is impossible for any country to succeed without paying their taxes. How can it be that of the 210m Pakistanis only 72,000 declare monthly incomes of Rs200,000 or more?"
The prime minister said that effective tax collection is central to any country's independence as "constant borrowing to make ends meet" eventually becomes a threat to its sovereignty.
The premier said he could even be open to slashing down taxes to extend the tax net but stressed that "paying taxes should be considered a national duty".
The prime minister assured the business community that his government will do all he can to facilitate them, indicating that "some more incentives are coming your way in the upcoming days".
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Mar 07, 2019 07:28pm
That is an excellent idea. Just disband the complete FBR and create a new authority with very small number ,fully laced with technology and younger generation.
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Mar 07, 2019 07:30pm
First of all pm and his aides should focus on bringing more people in tax net. Target people who are part of undocumented economy
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Mar 07, 2019 07:39pm
time to take action. FBR has all PpP and PMLN appointees in key positions from top to bottom. tax reforms and civil reforms are national securities matters and can not be dealt with lightly.
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Mar 07, 2019 07:42pm
Will the FBR personnel continue to avail their salaries and perks and bonuses equivalent to their basic pays or even double of that all the time and beyond when the new authority takes over its functions? Or will only the chosen ones from among them at the discretion of prime minister be provided with positions in the new upcoming set up?
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Mar 07, 2019 07:53pm
I hope that the new tax collecting authority will be corruption free.
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Mar 07, 2019 07:55pm
What a great leader.
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Mar 07, 2019 07:57pm
This is an imperitive idea which envision overhalt of fbr which is the need of the day. This is the only solution.
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Mar 07, 2019 07:58pm
Create a new tax service and shut down FBR. And please don’t call it an authority. Don’t wait because you will not be able to fix FBR. Secondly legislate so Government can lawfully terminate its employees who don’t meet job requirements or minimum efficiency standards. Talk less and act please.
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Mar 07, 2019 08:14pm
Exactly. if an institution cannot redeem itself , it must be eliminated and replaced an effective ,fit for purpose organisation that is itself transparent and accountable.
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Mar 07, 2019 08:19pm
I think changing the mentality and habits of old gards in FBR is just waste of time.
Disbanding the current FBR with a new one with all new faces is the only solution to salvage our economy. Waiting will just be a waste of time. It might be a warning to the other departments also who consider themselves as untouchable
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Mar 07, 2019 08:22pm
Mr. PM (present and past)
How much tax have you paid? Fully agree that reforming the FBR is must! Bring in new IT backed systems which will not allow anyone to escape from the tax net.
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Mar 07, 2019 08:23pm
Tax everyone. Tax more on luxury homes
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Mar 07, 2019 08:31pm
The reality is that most of those on top position and at lucrative position in FBR are relatives/nearones of the ruling class.The purpose is to gain illegal monetary benefits at the cost of government revenues.Since the top is corrupt and appointed on nepotism,the junior staff to fulfil the corrupt practices of their bosses is too corrupt to the core.The PM is to polite in this matter.
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Mar 07, 2019 08:33pm
A vast majority of the big restaurants, boutiques, furnishers outlets earning billions of rupees do not pay any tax at all. They want everything in hard cash no bank a/c. Its very easy to target them and install tax registers the way its done in many countries including in Africa. Take advantage of the technology.
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Mar 07, 2019 08:33pm
Same old people in government will never let the country and government succeed. Bring new generation and completely separated departments for every type of tax collection. Every tax department collect it’s own taxes. That will help identify which department is not collecting enough or committing corruption. Best thing is bringing new generation with talent and they will bring modernization and far better collection.
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Mar 07, 2019 08:34pm
The PM paid Rs 8000 per month tax last year as per his own declaration in EC. Rs 8000 is charged on a monthly income of around Rs 1 lak per month, so that is his declared income. Yes FBR must be disbanded
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Mar 07, 2019 08:36pm
True what PM has stated. No wonder that people in our nation are more financially strong than the state of Pakistan.
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Mar 07, 2019 08:40pm
Taxes and tax gathering fuel the nation...
Gordon D. Walker
Canada
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Mar 07, 2019 08:41pm
Why don't the PM starts from elected officials-How come all elected officials live and own assets including properties in Pakistan and abroad worth billions of dollars, and pay minimum income and wealth taxes.
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Mar 07, 2019 08:51pm
And creating jobs?
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Mar 07, 2019 08:51pm
Love you Mr Prime Minister. Please go ahead and do what you have to do to get rid of FBR.
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Mar 07, 2019 09:00pm
Abundning FBR and creating new FBR is not going to solve the problem. Real problem lies in the mind set. That is with the government. Million dollar question is that to what extent government is willing to challenge the tax theft. It is worth mentioning that only salaried person and Industrialists pay tax. Traders who earn hefty amount don't even file return/ pay taxes. I am from Lahore and will like to refresh the mind of tax authorities to go to Azam Cloth Market, Liberty Market, Branther Road, Circular Road, Akbari Mandi and shops in big plazas and see how much taxes are paid by these traders. Challenge them and they will go on strike. You give the power to increase the tax revenue to FBR. Give them the authority to take action against tax theives.
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Mar 07, 2019 09:02pm
@Raheel, That is the job of FBR. That is exactly what he is talking about.
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Mar 07, 2019 09:03pm
quite right. collection of tax is a must for the advancement of the country. All should pay tax you can't rely on the forces sacrificing their lives to protect the country while people dodge tax.
oversea Pakistanis willing to pay some tax to help.
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Mar 07, 2019 09:09pm
They should raise WHT on banking transactions. That'll ensure that people remain out of the tax net. They should also impose more stringent conditions for opening bank accounts so that we comply with the FATF demands but also prevent more people from doing transactions in the formal economy.
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Mar 07, 2019 09:10pm
The PM himself pays only Rs 100,000 annually.
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Mar 07, 2019 09:15pm
Great idea if implemented and is not a merely threat. Pakistan need to destroy the corruption in the department which still exist without any fear of all the noises being made by IK. Pakistan could earn billions of rupee by strengthening the existing laws. In Pakistan commercial properties are sold without paying exact amount capital gain taxes. In Pakistan their are millions of properties generating billions of rupees in rental income on which negligible taxes if any are paid. In addition Pakistan could be one of the very few countries where gifting of Properties to wives and children both adults and minors are not subject to inheritance taxes. If the Government is serious in its threats than they must find honest people who are well paid and looked after otherwise the sorry state of corruption will continue to flourish, Lastly Government should implement the WHISTLE BLOWING program urgently.
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Mar 07, 2019 09:15pm
well said, i can see after the india incident and his excellent handling of it, he has become confident enough to fight the battles he was brought in to fight.
he will make errors but given everything needs to be revamped, i am sure just by revamping everything, he will fix most of the big issues
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Mar 07, 2019 09:17pm
Skipper ! how about replacing your unpromising Finance Captain...! Shouldn't this statement be coming from him instead ?
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Mar 07, 2019 09:18pm
No need to disbandFBR but ask professional IT people with the help of NADRA and competent people in FBR with incentives and commission for
Them to recover hidden wealth as they FBR people
Are experts and can do their job very decently
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Mar 07, 2019 09:19pm
@Mansur Ul Haque, FBR has all the power to recover the taxes but their interest is self pocket.
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Mar 07, 2019 09:21pm
IK should also think about implementing progressive agricultural taxation.
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Mar 07, 2019 09:26pm
What about trashing NAB for a new accountability bureau?
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Mar 07, 2019 09:32pm
Good idea
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Mar 07, 2019 09:33pm
No mention of increasing the tax base again. If your biggest sector i.e the agricultural sector is not taxed especially bigger land owners then just squeezing the ones who are in the tax net will not bring change. If your tax base is not increased then everything is an eye wash.
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Mar 07, 2019 09:34pm
@Raheel, that's why he said all this..
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Mar 07, 2019 09:40pm
@Pakistani , There may still be few honest Pakistis in the business sector to pay their fair share. Others may think about the penalty and change their bhavior. There should always be a reward and punishment associated with most policies.
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Mar 07, 2019 09:49pm
Also aduit each every layer of FBR.
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Mar 07, 2019 10:06pm
Not only Taxation but also PIA, CDA, Wapda .... to reforming it again Sir,
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Mar 07, 2019 10:15pm
A final amnesty is required to whiten all money hidden under the pillow but this time there must be heavy penalties for those who do not declare this money.
It should be ensured that all those who pay more than 200,000 per year in utilities and children’s education are registered as tax payers.
Property rates when sold or bought should be shown as being close to market values and all government dues on such transfers be on this value.
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Mar 07, 2019 10:35pm
Bring all adult Pakistani to tax net. They should declare there income as every body in Canada or developed countries does. If somebody's income does not comes under tax net he need not pay.This is the only solution to tje problem, the govt should know the total earnimgs of the population. In Canada the whole population over the age of eighteen is under tax net
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Mar 07, 2019 10:36pm
Why should anyone pay tax? This government has only incentivized nonfilers by allowing them to buy all cars and buy property parking their black money in assets.
Further, tax payers should be exempt from additional taxation but they get taxed twice, once directly via income tax and then indirectly multiple times through WHT, Sales Tax, FED, etc. Plus they get no social security net in tough times. This is unfair.
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Mar 07, 2019 10:38pm
@Raheel, it is not PM job. It is the job of CBR. If they cannot increase the tax base then just abolish this department.
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Mar 07, 2019 10:42pm
First tell us where is money going for BRIT that is still not finishing!
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Mar 07, 2019 10:45pm
@Raheel, You want the PM and his aides to bring more people in the tax net. Isn't that the responsibility of the FBR? And isn't that exactly what the PM is saying he wants the FBR to do? And isn't that what the FBR officials don't want to do as it would be against their interest to do so?
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Mar 07, 2019 10:48pm
@Mubashir.Munir, another beneficiary chants!
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Mar 07, 2019 10:50pm
Thank you IK for once again being spot on in identifying and attempting to resolve a major issue facing Pak. Tax evasion by the rich.
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Mar 07, 2019 11:00pm
What's the point just keep saying it, just do it. you are the leader do what you thing is right.
Having said that I will add that in the West people file taxes automatically if you make an income. In West you must file if you owe taxes on your income but if you don't owe taxes or you are due a refund then it is up to you if you want to file or not. The reason everyone automatically file taxes is because not filing taxes is considered a criminal offence and there are very severe penalties and punishments for not filing. Taxation authorities don't force anyone to file but they do random audits and the onus is on the taxpayer to prove that what you filed is correct or you don't owe taxes. If the tax payer can't prove that what is submitted is true then he/she is in trouble.
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Mar 07, 2019 11:05pm
empowers Union Council offices to register all businesses whether small or large.
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Mar 07, 2019 11:19pm
Salary wage earners are automatically charged Income Tax before they receive their monthly wages. Bring in the landlords, agriculturists and industrialists under the tax umbrella. They manage to charge all family, travel and entertainment expenses to their corporate accounts.
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Mar 07, 2019 11:26pm
Under new authority PM wont even pay 8000 per months which he has paid last year.
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Mar 07, 2019 11:32pm
digital economy is the only solution
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Mar 07, 2019 11:41pm
@Yawar, tax evasion is because of a flawed system. Every person or family in Pakistan has to submit their earnings and taxes (if any) to CBR. Every person or family (talking about non dependents). Even if your income is zero nothing even then fill the tax forms. Some will be paying taxes and a lot will be getting back. Do it the way it is done in the US. Fill you tax form for CBR against your identification card. It is that simple and it is not rocket science.
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Mar 07, 2019 11:53pm
Best option would be to disband not fit for purpose FBR and create a new Tax authority. At the same time, what the govt has done to bring leading agriculturists & professionals into tax net? Majority of Doctors & other professionals pay little or no taxes.
FBR must follow a sophisticated approach to document transactions of retail and wholesale trade which accounts for half of the country's GDP and yet pay very little in taxes other than indirect taxes.
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Mar 07, 2019 11:56pm
And, then transfer people from FBR to that authority. Experience is an actual thing in the real world.
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Mar 08, 2019 12:05am
First the P.M.and elites should start paying real taxes ...
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Mar 08, 2019 12:38am
Severe penalties with criminal offence proceeding for giving false information in tax return is the key for successful revenue collection like they do in the West.
Having just increase in tax filers is not good enough when people are declaring only tiny part of their real income or assets.
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Mar 08, 2019 12:40am
FBR is non coporative. Better approach is we should move forward with it an create new institution which can provide better facilities for tax payers and help them instead
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Mar 08, 2019 12:45am
@JAVED RAHMAN, This is what they should work on to have a database of all adults be it villages, small towns not just for big cities.
It's a myth that sorting it this in five big cities will solve the problem of poor take up of filers.
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Mar 08, 2019 12:58am
@Mansur Ul Haque, What about the big clinics and hospitals not just in Lahore but even smaller town across the country, vast area of deceptively high income.
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Mar 08, 2019 01:08am
Any tax authority will become the same corruption den like FRR, within no time
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Mar 08, 2019 01:16am
Reforms are adversely required. Technical people and technology will solve this problem. Existing staff may be layoff.
Put software application to all businesses B2B or B2C or G2G, which records all inventory flow in and out. By this business will be streamlined, profit, expenses and taxes are automatically submitted to respective accounts. Items which are not registered in this application are considered to illegally and the person who do this is considered to criminal. Government also encourage digital currency.
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Mar 08, 2019 01:17am
@ali ahmed, - your comments do not stick. How do you know that PM is not paying his tax?
Be constructive and write helpful lines to assist government and public. Being negative doesn’t resolve any issue and writing without credible proof is as bad. Thanks
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Mar 08, 2019 01:21am
If Imran Khan is serious about taxes he needs to institute property tax across the country by:
1) Computerizing ALL Property tax records and putting them online.
2) Valuing the property and taxing them based on the current market value.
Even 0.5% tax per year will generate enough money to take care off all deficits and put country on a sound fiscal path.
This will not only tremendously and fairly increase the tax base but it will eliminate the Kabza Mafia and protect expatriate Pakistani's from property fraud.
And this can be done in a matter of couple of years if government truly puts its weight behind it. Lot of work in Punjab has already been done for computerization of land records.
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Mar 08, 2019 01:33am
The present government policy is corruption oriented as recently they revised value of properties in each area of Pakistan but again they favoured the corrupts and those with ill gotten money by declaring 1/3rd of the current price.In DHA Karachi they fixed price of Rs48000 per sq yd whereas the actual price is Rs150000 per sq yd.Thus whom they are trying to fool.
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Mar 08, 2019 01:45am
FBR are unprofessional and corrupt who offer massively reduced tax bills if tax payers pays them a side payment in cash. I have experienced this personally and was impressed when the FBR official was told by my uncle that he would rather pay the tax bill than reduce it by paying them corruption.
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Mar 08, 2019 01:58am
There is no way out but to disband the FBR and replace it with a new revenue service. Please don’t waste any more time!
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Mar 08, 2019 02:10am
@Adeel Khan, No need to create a new department. Just send FBR staff home especially those who assess people earning and few at the top. Hire competent people who can show results. Ok if I have been the director of FBR what I will do.
1. Create a database of people/businesses based on their age and identity card and business name and business code.
2. Create standard tax forms for people and businesses to fill and submit.
That is it. Do not penalize people if they have not paid any tax in the past. This approach is moving forward. Keep my words. It is about moving forward. I am not talking about big fish - Zardari or Nawaz. I am am talking about mainstream Pakistani like doctors and engineers. If they have evaded taxes in the past - not a big deal - ask them to pay taxes in future under the new system - moving forward
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Mar 08, 2019 02:10am
Strange, want to expand tax net, but no tax on the feudals/ agricultural workers, the majority of the country.
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Mar 08, 2019 02:45am
That is a brilliant idea. It probably cannot be fixed, but he will get more cooperation out of the FBR bureaucrats for a start.
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Mar 08, 2019 05:55am
Do not waste valuable time in trying to fix FBR. Just abolish it and create a new Revenue body.
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Mar 08, 2019 06:16am
Would wonder just how hard it would be add those Feudals and Elites to the Pakistani Direct Tax Net? Tax revenues would probably triple from current regime where only little people pay direct taxes!
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Mar 08, 2019 06:37am
great idea . do it as soon as possible. kick out the black sheeps.
this is thinking PM of Pakistan!
and do reduce the tax so people don't feel burdened to pay it. then do tax return annually so if someone paid more than they should've will get a return.
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Mar 08, 2019 06:37am
@Sameer, that’s your lack of information. All top position at FBR are occupied by CSS officers
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Mar 08, 2019 06:42am
10 times fine on hiding income or paying taxes, plus ban their children to get passport, ban them from all government jobs, and if someone does it second time, confiscate their whole property.
equally fine the concerned authorities in the tax department.
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Mar 08, 2019 07:36am
The PM is the right track perhaps to disband FBR, a bureaucratic set up marred by corrupt practices. The Government may want to consider privatising as one option or merging all tax collection Authorities under one umbrella as PBR but a more practical solution perhaps lies in cutting income tax down to 10% and 15% for corporation and to increase indirect taxation (sales tax or VAT to say 12.5%). In addition once there is success rates of duty to be reduced or abandoned in favour of variable VAT between 12.5% to 20%.
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Mar 08, 2019 07:54am
Every day new idea by IK .
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Mar 08, 2019 08:39am
Tax collection of RS.0.4 million from Imran Khan, around RS.2.5 million from NS and many such "just" collections are enough reasons to create a "Naya FBR.
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Mar 08, 2019 08:48am
Help business community means help Pakistan. , Re work fbr means re work the revenue . Time is too short to do so many things.
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Mar 08, 2019 09:21am
The tax net bracket should be reduced to Rs. 1 lacs per month.
My monthly pay is between 100 to 150 thousand, but I pay a meagre amount legally to the government.
I am willing to pay 1500 in taxes, and many others I am sure.
Increasing the tax bracket will greatly boost government revenues.
Instead of wasting the money on prodigal expenses, the amount can be spent in the betterment of the society particularly the poor.
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Mar 08, 2019 12:14pm
They must be sent home with confiscation of their local and foreign properties in names of their siblings. The general people know their properties, the colleagues and relatives will be ready to expose all. Also who were appointed and promoted by whom and all. The culprits must go home except only few who fight for the honesty and are behind the doors.
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Mar 08, 2019 12:34pm
This is need of an hour, already our tax collection is disappointed.
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Mar 08, 2019 02:09pm
What will be the point of this exercise when an amnesty scheme is launched every second year?
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Mar 08, 2019 02:29pm
@Khan jee, "Help business community means help Pakistan. " Why the business community needs help? They are the first to advocate for free market. If they need help the should get it from Saylani, or Edhi etc, like the rest of population.
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Mar 08, 2019 04:37pm
We have to extend tax return if linked with NIC number.
If he keep on practice as non filers, make him/family member under his guardianship unable to do transactions from the bank.
Secondly bared him from Domestic flying.
NIC number will add value to it.
If some one doesn’t agree is a supporters of non filers.
“Pakistan Zindabad” & “Longlive Pakistan”
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Mar 08, 2019 06:10pm
I guess, there is no need to think about on this matter, Imran Khan should immediately close / shut down FBR, or overhaul the current structure. There are multiple problems in FBR's structure and tax collection process:
(i) Corruption
(ii) Incompetent staff
(iii) Most Staff are on retirement age, they don't have capacity to handle work burden
(iii) People have been appointed / assigned as Commissioner / Deputy Commissioner, who does not have any experience and understanding of tax law:
(Iv) No control and monitoring on the measurement of performance
(v) Disciplinary issues
(vi) Concerned about short term Targets
The more time you take on deciding the matter, it will create more problem. FBR has brought us to a failed state.
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Mar 08, 2019 07:45pm
It was the sacred and religious duty of all past political parties, to loot and plunder Pakistan. So unless IK gets a significant amount of looted money back from these enemies of the state, people will not win the confidence of IK
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Mar 10, 2019 09:06am
The people are willing for paying taxes.but FBR reputation is not gòod at all.FBR torture the people who pay tax through by different tactics.we don't trust FBR. Its corrupt authority needs quick reforms to make it trustworthy.
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