15 May 2004	Saturday	24 Rabi-ul-Awwal 1425

KARACHI, May 14: The All Pakistan Tax Bar Association (APTBA) has sought end to discretionary powers of tax collectors for building better image of the revenue department.

Referring to the reform agenda undertaken by the government to improve the tax system, the APTBA says: "The psyche of tax collectors has not changed, the confidence of the public has not restored, even today the environment was not such that could attract even a local investor."

The APTBA asserted that a lot had been said to provide facilities to the taxpayers but practically there was nothing on the ground. So far, the CBR has only been able to change the wrapper, whereas there is no change in the quality of the product.

In its proposals for the budget 2004-05, the APTBA pointed out that in spite of all its powers and commitments the government seemed helpless before taxpayers and tax collectors. "Taxpayers are not ready to come forward or comply voluntarily. They are reluctant to come into the tax net because of their own logic and reasons."

On the other hand, the tax collectors are also not ready to withdraw their discretionary powers, which were the main attraction of their service and acknowledgement in the society. They are also not ready to leave all these privileges only because they get additional salary.

The APTBA further states that most of the tax laws and procedures are simple but mala fide implementation made these laws a problematic one. It says tax system in Pakistan has always created hurdles in its smooth running.

History shows that provision of a law or policy has always given fruitful results. This practice has always encouraged economic activities, whether it was 1990 when the powers of issuance of show-cause notices or assessments were withdrawn by introducing presumptive tax regime or 2003 when the powers of tax machinery were withdrawn by introducing the Universal Self-Assessment Scheme.

The APTBA suggests that if the government is desirous of building the image of revenue departments it has to go for zero powers to tax machinery. The association urged the government to set up a system to provide a strong, fair and free audit.

The APTBA disapproves the abolishing of circle-based system and states: "We understand that with some modifications (based on zero powers to tax collectors) this is the only system whereby the number of income taxpayers could be enhanced." It expressed its apprehensions that by abolishing the circle-based system the government would squeeze the number of return filers.

Therefore, the association feels that tax system of the country was heading towards an unidentified destination and it will require a decade to understand and know the results, which may also be a negative one.

The APTBA demands that each and every person liable to pay tax should be on the tax roll and should file their income tax or sales tax return, and in case of failure there should be a mechanism to make them bound to fulfil their legal obligation.

The APTBA says it is not against the establishment of Medium Taxpayers Unit, Large Taxpayers Unit or Model Tax Units, but understands that the government could not accommodate all taxpayers by establishing these units in such a large number.