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Traders and experts are of the view that the scheme is complicated

Sep 25 - Oct 01, 2000

Self-Assessment Scheme (SAS) 2000 has started new debate among the business community and traders with its unprecedented tough conditions and limitations. SAS announced when only two weeks remaining to file tax returns. SAS mainly aims at inviting applications for the tax returns without having troublesome routine process of normal tax assessment. But experts and traders are of the view that due to its complications and harsh terms SAS will not be able to produce any fruitful results.

Talking to PAGE, Bashir Miandad, Central Chairman Pakistan Small Chamber of Commerce and Cottage Industry said, SAS scheme announced by the government seems contradictory to their claims to benefit the traders and business community. He further said that majority of tax payer would be excluded to avail the SAS due to provisions and limitations. The cases which had been filed for preceding two immediate assessment years will not be eligible for SAS is an irrational step and conspiracy to exclude the majority to come to avail SAS, he added.

He said that these provisions would shrink the scope of the policy and would be resulted in a drastic decline in revenues. Bashir Miandad also criticized the 9 page form with high degree of complexity will raise fears among tax payers. With the present conditions only few per cent of tax payer would get benefit out of the scheme and majority will not be benefited.

Policy also providee that persons who have whitened their money through (Tax Amnesty Scheme)TAS will only required to declare those assets and sources of payment which remain undeclared through TAS. Scheme also demands 20 per cent more taxes as compared to last year's 10 per cent is also a big question mark. Another question mark arises regarding the detailed audit of the 10 per cent filed returns but Central Board of Revenue have not capacity to do so.

He further said that policy has excluded the large number of tax payers from the scheme, only salaried class and house property owner are mainly focused. All cases of public limited companies engaged in a leasing, modarbas and banking, companies filing returns as new tax payer will not be eligible for the scheme. A chain of harsh conditions show that scheme is not focused to make all new tax payer to avail the scheme.

He also called the decision unjust in which tax payers are bound to get registered with the Sales Tax Act1990. This condition once again has opened the door for new controversies as tax survey dispute has not been completely settled so far, he added. He said that government should take steps to encourage tax evaders to come under the tax net but these conditions would further alienate government and detriment to increase the tax base in the country. Regarding tax collection issue, restriction to get registered with GST has also made this scheme controversial, he added. This will not only create problems for under net traders but it too discourage the new tax payers. So government must realize that SAS should be subject to facilitate the tax payers rather than create further problems and controversies.


He also demanded the extension in the last date for filing tax returns, as discussed earlier that scheme is announced just two weeks before the last date. It is demanded by the business community and traders to extend the date for filing their returns till October 31st rather than September 30, 2000 as the time given is not enough to gather all the informations, which are required in connection with the self assessment-scheme.

Requirement to file the copies of final accounts, personal accounts, and wealth statement of proprietor or partner with the return shoots up the fear being exploited by the tax authorities. In case of organizations where formal accounts are not maintained a proper transaction and computation chart should be filed with the return. This condition seems impractical as assessee is bound to furnish all the necessary details. Besides this new tax payer is also bound to show all the capital investment.

He also said that government always claimed to being friendly with the traders and tax payers but extensive discretionary powers given to the tax collectors for investigation, probing and assessment will broaden the gap between government and tax payers. It will also open the new doors for corruption and exploitation of the tax payers who are already scared of tax survey.

Bashir further said, taxes are the great sources of revenues for the country and assessment scheme helps to generate revenue but in this case the scheme will increase the sense of insecurity among the present tax payers and discourage new tax payers.

Although the approach of the government to broaden the tax base in the country is impressive but disqualifying the majority of tax payers from this scheme seems senseless. Normal tax payers want simplicity in the process of income tax but presently it is going more difficult and complicated. So government should revise the above discussed provisions in order to get the true results of the policy.

It is general experience that after every decision and scheme a storm of hues and cries arise. If the representatives of the payers and traders is invited for their opinion before formulating the policy, possibility of unnecessary amendments and controversies can be avoided.