The Islamabad Chamber of Commerce and Industry (ICCI) on Saturday termed the four-year tax amnesty scheme announced by Prime Minister Nawaz Sharif for traders a good move as it would help broaden the tax net and improve revenue collection.
ICCI President Atif Ikram Sheikh, Senior Vice President Sheikh Pervez Ahmed and Vice President Sheikh Abdul Waheed, in a joint statement on Saturday said that one of the main reasons of tax evasion in the country was a complicated system which discouraged many potential taxpayers from coming into the net.
The voluntary tax compliance scheme, they hoped, would have a positive impact as it would encourage documentation of informal economy by allowing the non-filing traders to regularise their undeclared working capital of up to Rs 50 million by paying a nominal tax of 1 per cent for the tax year 2015.
They expected that the scheme would end the deadlock over 0.6 per cent withholding tax on banking transactions between the traders and the government. It was a good opportunity for non-filing traders to come forward and take full advantage of the amnesty scheme by becoming regular taxpayer as the government had addressed their grievances, they added.
Atif Ikram Sheikh said some other countries had also announced such amnesty schemes for increasing tax revenue. Considering the prevailing trend of low tax revenue collection, it was a good measure for broadening the tax net because it would ensure tax contribution by many new taxpayers, he added.
He said the scheme of regularising undeclared working capital of up to Rs 50 million at the rate of one per cent tax was also good as it would discourage unhealthy trends like money laundering and whitening money through Havala etc.
He said currently there were hardly one million taxpayers out of a population of over 190 million and the scheme was expected to bring millions of new people into the tax net leading to improvement in country’s tax-to-GDP ratio. Another good advantage of the scheme was that the traders availing themselves of it would be exempted from audit for four years, he said, and urged the non-filers to take maximum benefit of it by paying tax dues.