ISLAMABAD: After a delay of more than two years, the Federal Board of Revenue (FBR) on Monday announced that the Benami Act will become operational from Feb 8 onwards allowing government to confiscate properties and bank accounts registered with fictitious individuals.
“We have drafted rules for the implementation of the much-awaited Benami Act and forwarded to the Law Division”, said FBR Member Inland Revenue (IR) Policy Dr Hamid Ateeq Sarwar.
He said the law, which is in line with government’s efforts to document the economy, will allow authorities to take strict action against movable and immovable assets registered with fictitious individuals in order to avoid taxes. The legislation was made through an act of parliament in Jan 2017 but was put on cold burner owing to delay in finalisation of rules.
Asked whether government will provide amnesty to individuals who registered their assets in fictitious person’s name before the enactment of law, Dr Hamid said that he was not aware of such decision at the moment.
ST collection on services
Highlighting the issues arising from overlap in collection of sales tax on services between the federal and provincial revenue authorities, dr Hamid said the issue will be taken up during the National Finance Commission meeting. He suggested the collection of sales tax should either be solely handed over to the FBR or a single tax authority should be setup for collection of taxes across the country.
He said the overlap in collection in the absence of single authority is creating undue hurdles for businessmen across the country. As part of ease of doing business, the member said the federal government will take up this issue with the provinces.
Answering a question, he said that FBR received Rs12 billion in taxes from property transactions adding that “we expect this collection to reach Rs15bn by June end.” He also said the valuation table for taxation is still far behind the market value.
6,000 notices to HNWI
Member IR Operations Seema Shakil said that around 6,000 notices were issued to high net-worth individuals (HNWI) in the past two months. Of these, she said the tax demand was of Rs6bn in 204 cases whereas recovery made so far after the assessment was at Rs2.6bn. Moreover, she said the chief commissioner Lahore is looking into the Aleema Khanum’s case.
She added that the FBR issued notices to non-residents without any discrimination while adding that the second notice will be issued after due approval from higher authorities.
“We will also issue a clarification in this regard as well”, she informed adding that the issues of genuine taxpayers will be also taken into account. The member requested individuals who had received notices to submit their replies by clarifying whether they had availed the amnesty scheme or were legitimate taxpayers.
