and experts are of the view that the scheme is complicated
BY FARAZ SIDDIQUI
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
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
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.