Islamabad: Islamabad Chamber of Commerce and Industry has welcomed the four-year tax amnesty scheme announced by the Prime Ministers for traders and termed it a good move as it would help in broadening the tax net and improving the tax revenue of the country.
Atif Ikram Sheikh President, Sheikh Pervez Ahmed Senior Vice President and Sheikh Abdul Waheed Vice President, Islamabad Chamber of Commerce and Industry said that one of the main reasons of tax evasion in Pakistan was a complicated tax system which discouraged many potential taxpayers from coming into the tax net.
They hoped that voluntary tax compliance scheme would have a positive impact as it would encourage documentation of informal economy by allowing the non-filing traders to regularize their undeclared working capital of up to Rs.50 million by paying a nominal tax of 1 percent for the tax year 2015.
They said withholding tax @ 0.6 percent on banking transactions had become a highly controversial issue between traders and the government and hoped that this scheme would end the deadlock over this issue. They said it was a good opportunity for non-filing traders to come forward and take full advantage of this amnesty by becoming regular taxpayer as government has addressed their grievances.
Atif Ikram Sheikh said some other countries have also announced such amnesty schemes for increasing tax revenue and added that considering the prevailing trend of low tax revenue collection, it was a good measure for broadening the tax net because it would ensure tax contribution by many new taxpayers.
He said the scheme of regularizing undeclared working capital of up to Rs.50 million at the rate of one percent tax was also good in the sense that it would discourage unhealthy trends like money laundering and whitening money through havala etc.
He said currently there were hardly one million taxpayers out of a population of over 190 million and this scheme was expected to bring millions of new taxpayers into the tax net leading to improvement in country’s tax-to-GDP ratio. He said another good advantage of this scheme was that the traders availing themselves of it would be exempted from audit for four years and stressed that non-filers should take maximum benefit of this scheme by paying tax dues.