Tax collectors are once again unsheathing their swords to scare the hell out of the common man
IT’S tax time once again. Salaried persons are complaining for the umpteenth time that they are most heavily taxed. Their income is fixed and tax is withheld at source. They cannot claim any expenditure against their income. Those who are paid a part of salary officially and a part under the table also protest with the rest; but deep down they are chuckling.
Individuals who pay taxes under the normal tax regime have awakened from their slumber and are running from pillar to post to hire accountants to prepare the books of accounts to support their tax returns. The profit and loss account does not start from sales downwards to net profit, but are fabricated from what amount they are willing to pay as taxes and then work their way up. The part time accountants are active in soliciting work and negotiating the fees for rendering services based on a specific amount per month, multiplied by 12 months. The shrewd business people obviously are not going to fall in this trap but will negotiate the full year’s work on a lump sum basis, which the poor accountants will reluctantly concede.
The retailers have been given an option to pay a fixed tax on sales with the patent words of the government that no questions will be asked. Confusion abounds. Should the Central Board of Revenue be trusted? Whispers are plentiful. The tax at a fixed rate on the sales declared that the previous year came very high. The devil inside shouts. Reduce the sales figure. Smiles across many faces.
The untouchables of the Jodia Bazaar, the big importers and traders, are relaxed. No need to maintain books of accounts. No need to fill in complicated tax returns. No need to hire accountants. Alas, the market of young aspiring accounting graduates is slashed.
The companies having their year end on June 30 are in no rush. The last date to file returns is still a few months away, that is, December 31. Directors have still time to sit with their controller finances and discuss strategies to make necessary adjustments to evade and avoid paying taxes.
A pandemonium is witnessed for gathering tax challans from customers. Subscribers of mobile telephones availing postpaid facility are making a beeline to mobile phone companies for obtaining certificates of taxes withheld during the year to claim in their returns. Similar lines are witnessed at the banks to obtain bank statements and certificates of taxes withheld on profit on debt. Mobile phone users having opted for prepaid facility are unclear as to how they will claim the advance taxes paid. Many are seen rummaging the garbage dumps to collect as many used cards as possible to avail maximum tax credit.
Time for photocopy shops to make a fortune. All and sundry are queuing up for making copies of utility bills, tax challans, evidences and supportings to be annexed to the tax returns.
Seminars and workshops are being conducted on a war footing to understand tax returns. A lot of questions raised by the public in general, and tax practitioners in particular, as to what should be filled where. The government is happy to announce that they have succeeded in bringing out a one-page return. People are scratching their heads with a stupid look on their faces and looking up the meaning of the phrase “one-page return” in the dictionary. An example will prove the point. The return which a salaried tax payer has to file is as follows. An Employer’s certificate - 1, Attachment to the certificate for salaried persons having other sources of income — 2 (Salaried persons will have a savings bank account on which profit is received, howsoever nominal), Annexure of Income from other sources (for disclosing profit on debt) - 3, Annexure of Tax reductions (to claim salary tax rebate) — 4, Annexure Tax already paid (to disclose tax withheld on profit on savings accounts, mobile phone etc - 5. Five statements to be filed by salaried tax payers, receiving salary income and a measly profit of Rs10 in a PLS account (Rs10 will be spent on purchasing the five statements). Not to mention filing of separate return for dividend income etc.
The Central Board of Revenue claims that they have an elaborate database which will help them to surface any concealment by the incumbents. It sounds like a deja vu as these golden words were heard at the time of a general tax survey held a few years back, but it did not help them to broaden the tax base. Well it seems that the CBR is following the age old adage ‘Say no evil, hear no evil, and see no evil.’ The numbers of houses in the posh localities of the cities of our beloved country are well in excess of the numbers of taxpayers.
So what if the CBR has not managed to drag the residents of the Defence Housing Authorities in the tax net (for reasons best known to them). They have been successful in taxing traders of the stock exchanges. What a paltry sum collected in the first month of the fiscal as compared to the gigantic transactions taking place every day, or should we say, every minute.
A piece of advice. Newly weds who are planning to go for their honeymoon outside Pakistan should leave their wives behind as the fair sex will be dragged into the tax net as is stipulated in the Income Tax Ordinance that whosoever proceeds for travel abroad will mandatorily be required to file a return. Three cheers to the mafia of hotels in the northern areas. Hip hip hurray.
Tax collectors are once again unsheathing their swords to scare the hell out of the common man
