• Ordinance gave FBR powers to disable SIMs, disconnect utility connections of non-filers
• Official says traders’ misunderstandings removed

ISLAMABAD: Traders have postponed a countrywide strike announced for Sept 27 (today) after the Federal Board of Revenue (FBR) gave an undertaking that small traders would not be deprived of electricity and gas supply and mobile phone services on the application of new tax laws introduced through a recent presidential ordinance.

The decision was announced at a news conference here on Sunday by leaders of a number of small traders’ bodies and FBR’s Member Operations Qaiser Iqbal.

“All confusions and misunderstandings of small traders on the Tax Laws (Third Amendment) Ordinance were removed,” said an official announcement.

The government had promulgated a presidential ordinance on Sept 17 giving wide ranging powers to the FBR to disable mobile phone SIMs and disconnect electricity and gas connections of non-filers through data matching with the National Database and Registration Authority (Nadra) using artificial intelligence.

A small traders’ delegation led by Markazi Tanzeem Tajiran, Pakistan, president Kashif Chaudhry and the FBR member had been holding discussions for the last few days.

“The confusions and misunderstandings of small traders, especially with reference to Tax Laws (Third Amendment) Ordinance-2021 were addressed,” said Qaiser Iqbal.

The key objective was to register professionals and un-registered traders who were operating from their homes, he said, adding that the application of Point of Sale (POS) did not pertain to small traders who were not required to install it.

While clarifying Section 114B of the Income Tax Ordinance-2001, the FBR member said the general public was being misled by vested groups leading to believe that their electricity and gas connections would be disconnected and their mobile phones disabled.

“Only those persons who are not appearing on Active Taxpayers List (ATL) will face this treatment,” he added.

While giving an explanation of Sub Section (1A) of Section 235 of the Income Tax, 2001, Member IR Operations stated that the change in rate of advance tax on electricity bill as introduced in the Tax Laws (Third Amendment) Ordinance-2021 would neither affect small traders nor any other person who was an income tax filer.

“This provision has been introduced to bring non-tax paying ‘professionals’ in the tax net,” he said, adding that “it will not affect commercial consumers of electricity”.

He said commissioners had also been advised to listen to the concerns of traders and resolve their issues at the local level. Another official said some professionals were spreading misinformation to secure wider support from traders against the application of new measures introduced to expand the tax base by tracing potential tax evaders.

Traders’ leader Kashif Chaudhry said they were satisfied with the assurance and explanations of the FBR member.

He said he spoke on behalf of a number of other small traders, reported to have come from all over the country and were present at the news conference to announce postponement of the protest call scheduled for Sept 27.

The traders had also announced that they would surround the finance ministry and FBR against the application of new tax laws.

The FBR member thanked the traders’ leadership for their understanding and cooperation and also assured them that all issues regarding tax laws and any other confusion shall be clarified by mutual discussions, leaving no space for unfounded propaganda or misinformation spread by irresponsible elements on social media.

According to FBR, those attending the concluding session of negotiations leading to postponement of their strike were representing small traders from across Pakistan.

Besides Kashif Chaudhry, those who attended the event included Khawaja Shahid Razzaq Sakka, Patron-in-Chief Markazi Tanzeem Tajiran Pakistan and President, Anjuman Tajiran, Faisalabad; Khawaja Suleman Siddiqui, Chairman, Markazi Tanzeem Tajiran Pakistan; Sharjeel Mir, Central President Tanzeem Tajiran Punjab; and about two dozen office-bearers of Markazi Tanzeem Tajiran from Khyber Pakhtunkhwa, Balochistan, Sindh and Punjab.

All traders’ leaders unanimously announced that they would keep playing their positive role and cooperate with FBR on vital issues related to tax compliance so that the national economy got strengthened and the country became economically self-reliant.

Under the new ordinance, a new section 114B (powers to enforce filing of returns) had been introduced in the Income Tax Ordinance 2001, empowering FBR to issue Income Tax General Order in respect of persons who are not appearing on ATL but are liable to file a return under the ordinance.

“The Income Tax General Order may entail any or all of the following consequences for the persons mentioned therein; such as disabling of mobile phones or SIMs, discontinuance of electricity and gas connections”.

Another big enforcement measure introduced through this ordinance is the changes in the penal regime for non-filers.

The penalty for the non-filers has been increased to Rs1,000 per day of default. The government has increased the amount of penalty for tier-1 retailers who are not integrated with the FBR.

The government has also imposed an additional advance tax on the rates ranging from five per cent to 35pc on the professionals using domestic electricity connections.

The professionals’ category covers accountants, lawyers, doctors, dentists, health professionals, engineers, architects, IT professionals, tutors, trainers and other persons engaged in the provision of services.

Published in Dawn, September 27th, 2021