November 26, 2006	Sunday	Ziqa'ad 4, 1427

ISLAMABAD, Nov 25: Tax experts of the 20 Islamic countries have adopted three reports on resource mobilisation, voluntary compliance and Shariah taxation with particular reference to Zakat.

The four-day technical conference, organised by Association of Tax Authorities of Islamic Countries (ATAIC), ended on Saturday with a note to further fine-tune these reports, which would be discussed at the fourth round of technical experts meeting.

The conference appreciated the idea of developing Islamic Taxation Model, proposed by the Iranian delegate with the understanding that the said model, after detailed research, would be presented in the forthcoming technical conference.

The Malaysian proposal for establishing a Zakat Fund by ATAIC was also considered a good idea to be translated into reality. It was emphasised that experiences, initiatives and development made by a country need to be shared with other members of the ATAIC throughout the year instead of waiting for annual conference.

Briefing newsmen after the concluding session CBR Chairman M Abdullah Yousuf, who was also the chairperson of the conference, said that the report on resource mobilisation highlighted improvement in tax-to-GDP ratio and broadening of tax base.

Replying to queries, Mr Yousuf explained that for the first time in Pakistan, self-assessment of income had been given a truly universal coverage and all categories of taxpayers were placed in its ambit.

He said during the conference, Pakistan, Iran, Malaysia, Turkey and Egypt also gave suggestions to enhance resource mobilisation.

On the compliance issues, the chairman said in the presentations of the delegates, some of the problems faced by the tax authorities were identified which includes low level of compliance amongst small traders, their incomplete and improper business record, distrust of business community on taxation system, lack of awareness and insufficient knowledge of tax obligations, weak enforcement and deterrence, negative mindset problem, narrowness of tax base and frequent changes in location.

The report highlighted the practices and efforts made by various member states to address the problems/issues. The report said that there were three major elements that form the basis of the efficiency of a tax system: rationalisation, simplification and modernisation.

The conference recommended that these should be included in any adopted tax policy as well as in its good governance. An appropriate balance between rigorous compliance to tax obligations and the guarantee of different rights of small taxpayers in developing economies were strongly recommended, he said.

On Shariah taxation, the chairman informed that three papers each from Iran, Malaysia and Pakistan were presented during the session. The common feature of these papers were the organisational structure for collection and distribution of Zakat, evaluation of progress made, weaknesses of their existing systems and attempts for their improvement.