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FBR and State Bank

July 22, 2013

THIS refers to the hue and cry being raised by tax authorities on the decline in the number of returns filed by NTN holders. One will appreciate that payment of tax and filing of returns are two different things.

Tax is being deducted at source on behalf of the employees by their employers, while tax on payment etc., made to suppliers or prize winners of prize bonds. Income paid on national savings instruments are deducted at source by the paying authorities and a return of such deductions submitted. Mostly retired people find it difficult to file returns. It was quite easy when they were in service as the office could take care of such routines.

The fact that they do not file returns does not necessarily mean that they are not paying taxes due on their investments as they are already deducted before any profit is paid to them.

Submission of returns is, therefore, not of any essence.

There was news report that FBR people are being authorised to look into the accounts of banks’s customers.

In fact, this cannot be done in the presence of an agile central bank. It will amount to infringement of the authority of the State Bank of Pakistan for the independence of which we are so much concerned.