September 14, 2006

The ITBAK enlightens tax payers on various matters affecting their interest and makes representations to the government and legislative bodies

Taxes are vital for any government to run a country. But sometimes the rules set by authorities become harsh and have an adverse effect on people. The Central Board of Revenue (CBR) will seek proposals from tax bars with regard to incorporating suitable amendment to rules and regulations governing eintermediaries, as the current section 52A(5) of rules are too harsh and damaging to tax consultants.

These views were expressed by Shahid Ahmed, member sales tax CBR, at the concluding session of a workshop on sales tax organised by the Income Tax Bar Association, Karachi (ITBAK), which is an association of income tax professionals of Karachi.

The aim of this association is to study problems of laws affecting taxation and to keep a close watch on the practical working of income tax and other taxation laws for the benefit of the people.

Responding to a point raised by ITBAK President Ali Rahim during the seminar, the member sales tax agreed that liabilities attached with sales tax are harsh, therefore, new rules should be formed for which the CBR will seek proposals from the tax bars.

Ahmed said the CBR had fixed high penalty for nonfiling of sales tax returns because it hurts others in claiming input tax, therefore, the spirit behind the high penalty was to ensure that sales tax returns were filed timely and regularly. Against this, he said penalty for income tax was very low which meant that in case a taxpayer did not file returns he hurts no body other than his own interest.

Ahmed pointed out that due to higher documentation and use of automation, the CBR had managed to collect record revenue of Rs712 billion last fiscal year and fixed a target of Rs835 billion, or 20 per cent higher, revenue collection for the current fiscal year.

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