Karachi industrialists ‘disappointed’ after meeting PM Khan

[Shahzaz ud din]

• Industrial sector contribution is 21% of the GDP but paying 71 % of the total tax
• Services sector is 60% of the total GDP but pay less than 6% of the total tax
• Out of 37 millions commercial electricity connection only 40 thousands are paying tax
• Out of 0.32 millions industrial units only 14000 pay nominal tax.
• Textile sector does business of PKR 2000 billion every year but pay tax of only PKR 6 billions instead -- get subsidy of PKR 200 billions on gas and electricity.
• Recent data collected by FBR and NADRA shows there are 53 million people who own property worth of billions but they pay no tax.
• There are total 80 sugar mills out of them 72 are in loss hence no tax but donot forget to get subsidy from the Govt.
• 300 top companies of Pakistan giving 80% of the total tax.
• 50000 out of 110000 listed companies in stock are not even registered with FBR.
• 30-40 % of the total 40 millions bank accounts are actually ghost accounts.
• Agri sector is 26% of the total GDP but hardly pay few billions of rupees as tax.This year agri sector is going to get subsidy of 300 billions of rupees as well.
• Power sector losses PKR 400-500 billions /year with total circular debt 0f PKR 1600 billions.
• Gas sector losses PKR 100-150 billions with total circular debt of PKR 250 billions.
• Sick units and companies like PSM and PIA etc need PKR 300-400 billions/year to keep them running.
• Pak Gold market owes undeclared gold worth of PKR 4-5 trllions but no tax
• $60-$70 billion lost each year due to smuggling and misuse of concessionary duties.
• A study published in 2016 by the Lahore Journal of Economics estimated more than $92.7 billion in losses from 1972 to 2013 for 52 major traded commodities for trade with 21 partners due to mis-invoicing. The gross revenue loss to the national exchequer was placed at $21.1 billion while loss of revenue in the form of custom duties evasion and export withholding tax was at $11 billion. The annual average net revenue loss due to it was roughly equal to 11.2 percent of revenue from tariffs. While trade with China was identified as one of the main culprits, it is by no means the only one.
  
• A PBC study on under-invoicing from UAE lists a range of goods from mineral and chemicals to dyes, cosmetics and textiles on which disparities were observed. As per the study, Pakistan loses about Rs.150-200 billion each year to under-invoicing
• Nawaz govt introduced a green channel facility which is also a disaster for the economy as Pakistan is losing Rs1-1.5 trillion on a yearly basis
  
• $10-$15 billion are laundered annually from Pakistan as per USA govt.

• ٹیکس کی عدم ادائیگی، اسلام آباد کے 59 کمرشل پلازے سیل کرنیکا فیصلہ
  • 
  
  
  اسلام آباد: (دنیا نیوز) کیپٹل ڈویلپمنٹ اتھارٹی (سی ڈی اے) نے کمرشل پلازوں کے ٹیکس واجبات کی عدم ادائیگی پر اسلام آباد کی 59 عمارتیں سیل کرنے کا فیصلہ کر لیا۔ یہ جائیدادیں وفاقی دارالحکومت کے پوش سیکٹرز میں واقع ہیں۔
  
  تفصیلات کے مطابق سی ڈی اے شعبہ ریونیو نے وفاقی دارالحکومت میں ٹیکس ادا نہ کرنے والے بڑے پلازوں اور شاپنگ مالز کی فہرست مرتب کر لی ہے۔
  
  ٹیکس ادا نہ کرنے والوں میں سیکٹر آئی ٹین کی سب سے زیادہ 24، سیکٹر آئی نائن اور سیکٹر آئی ایٹ کی 8، 8 جبکہ سیکڑ جی سکس اور بلیو ایریا کی 4، 4 جائیدادیں شامل ہیں۔
  
  سیکٹر ایف ایٹ، ایف ٹین اور جی ٹین کی 3، 3 پراپرٹیز کا بھی ٹیکس ادا نہیں کیا گیا۔ سیکٹر ایف الیون میں بھی 2 کمرشل پلازوں کو ٹیکس کی عدم ادائیگی پر سیل کیا جائے گا۔ ذرائع کا کہنا ہے کہ آئندہ چند روز میں مزید سیکٹرز میں کارروائی کی جائے گی۔

 

[guest9999]

Industry is 21% of the GDP but paying 71 % of the total tax
Services is 60% of the GDP but pay less than 6% of the total tax
Out 37 millions commercial electricity connection only 40 thousands are paying tax
Out of 0.32 millions industrial units only 14000 pay nominal tax.
Textile sector does business of PKR 2000 billion but pay tax of only PKR 6 billions instead get subsidy of PKR 200 billions on gas and electricity.
Recent data collected by FBR and NADRA shows there are 53 million people who own property worth of billions but pay no tax.
There are total 80 sugar mills out of them 72 are in loss hence no tax but donot forget to get subsidy from the Govt.
300 top companies giving 80% of the total tax.

And people wonder why the country is a dump? How is the country supposed to afford anything, let alone defend itself against Indian military?

 

[1Paki$tani]

every trader (registered or unregistered) should form a business entity. call it what you want

I second that.

Everyone should be required to obtain business registration number.

 

[Wa Muhammada]

Could someone explain to a layman (not lamer ) like me why CNIC’s are important for purchases above 50,000rs

 

[1Paki$tani]

That is not how it works because what classifies as an expense for a business entity or an individual for tax purposes differs.
Moreover you have failed to understand the point here. Wherever a cash transaction takes place at least there is a CNIC to track whatever amount is being purchased and by whom so these people do not get away with under-invoicing.

Of any expense they claim they must have receipts whether cash or otherwise and as part of return lodgement they must be required to provide copy of these invoices.

Invoice must have the purchaser's name, the seller's name, business registration number and tax number.

On FBR part they need to invest in technology to analysis, classify and cross reference each and every invoice presented. Where the invoice details do not match up ie business name and NTN than dont allow deduction. However, where it does match up allow deduction but than cross reference the supplier to make sure the supplier has declared that income. If not than penalise the supplier for under reporting the income.

Example:

Trader A sellers at whole sale to trader B. For Trader A its income and for Trader B is expense.

In their respective filing Trader A must show the transaction as income and pay taxes (after taking into account cost of purchaser or other credits) and Trader B will show that as expense (though by on sale it might make a profit, but to keep it simple).

However if Trader B files the return and discloses the expenses but Trader A doesnt than through data matching FBR should be able to identify that Trader A has not disclosed income.

Expanding this now imagine in one year trader A had 100 transactions and Trader A's customers would be 100. Now if there are 100 claims for deduction but trader A has only disclosed 80 Transaction, through data matching Trader A can be caught.

Dont tell me it is now possible. The world has moved so far ahead in technology. If in China they can pick out a person from stadium full of crowed through facial recognition or in my field as lawyer we have e discovery software which goes through thousand of documents to find a single keyword than this data matching is at the simplest scale.

Slowly make people use etechnology to keep record to make data matching simple. Everyone in Pakistan has mart phone and every trader can afford small tablet or computer.

 

[Yaseen1]

I think govt should implement this gradually otherwise these traders and industry owner will create shortage of necessary goods which will increase inflation and badly affect poor public

 

[Thorough Pro]

Tax theft is a basic right of Pakistani traders. I wonder why do they even bother to waste their time doing business when they can directly rob banks or other people.

 

[ps3linux]

@ps3linux @Reddington
on one breath they crying Tax inspector harassed them when try to convert things to automation so there would be no need of inspection personally by inspector and asking for CNIC is first step towards it they start again crying its will destroy business .chaty kiya hain yeh ???short version if CNIC is putting on every sale and that data not match as presented by buyer(which is ordinary citizen always paying all kind of direct/indirect taxes) he bought something from that shop and that not going to show in shops/business record bus yeh issue hai for them.i over simplified it undocumented economy is also heavily rely on parallel/black economy so its going to be double shock for them

Of course the meeting was disappointing, Govt is not interested in resolving genuine concerns of traders, and all that crap, underlying problem which everyone understands is they are asking don't document us, don't tax us, don't ask for proof.

Just fix corruption and the economy. People cry about indirect taxes in Pakistan, what they don't want to understand is indirect taxes are levied upon where people don't pay direct taxes. There are actually about two million filers, only about 1.7 million pay taxes directly, and out of those ballpark 1.4 million are salaried individuals.

Anyone with a working brain will understand what our real problem is in tax collection.

 

[The Accountant]

What's wrong with presenting CNIC's ?? How it stops investment, jobs or trade, can some one enlighten me please?

It will expose the real income of the traders and hence then their ability to hide income will reduce and hence they will be pushed to pay more tax

 

[I.R.A]

In our current situation any attempt to delay or sabotage documentation of economy, should be treated as an act of treason. The wholesalers and retailers they not only easily skip income taxes but sales tax as well ..... their habit of 'kacha invoice' has to go now. The boom in departmental store and these cash and carry retail chains and their success ..... has already enjoyed quite lengthy tax holidays.

 

[Ahmet Pasha]

Why are they upset bcz their tax evasion or the dirty tricks they are used to won't work anymore??

Or bcz the danda they wanted to give to their consumers has turned on them???

 

[blueazure]

Really good question. The answer is no. I wonder what the requirements is for B2B transactions - if any.

i dont need ID card for buying B2b from alibaba

nothing going to happen. the govt will simply surrender and HAS to cave in to traders demands.

its ironic, govts and state machinery have this hubris of power and force yet when ordinary people rise, it cant do much .

last time, transporters went on strike,, govt had to ACCEPT all their demands

 

[1Paki$tani]

i dont need ID card for buying B2b from alibaba

nothing going to happen. the govt will simply surrender and HAS to cave in to traders demands.

its ironic, govts and state machinery have this hubris of power and force yet when ordinary people rise, it cant do much .

last time, transporters went on strike,, govt had to ACCEPT all their demands

So you are telling me that on Ali baba your account does not get verified? You dont provide personal information to create the account?
Payment systems are not verified?

Yes you dont have to show id every time because the verification has occurred and is retained in the systems and on each transaction that verification occurs whether you like it or not.

Why are they upset bcz their tax evasion or the dirty tricks they are used to won't work anymore??

Or bcz the danda they wanted to give to their consumers has turned on them???

Let them protest. For how long can they sustain this? few days, a week at best?

They are businessmen and everyday counts and they know they will be hurting their own pocket.

Government only takes small percentage of their profit in taxes and vast majority still ends up in their pocket. So with each passing day they are losing revenue.

 

[blueazure]

So you are telling me that on Ali baba your account does not get verified? You dont provide personal information to create the account?
Payment systems are not verified?

Yes you dont have to show id every time because the verification has occurred and is retained in the systems and on each transaction that verification occurs whether you like it or not.

.

only_

email verified

your address, obviously, where will they deliver ?

nothing more, no govt IDs , no fones

pay them and take ur stuff, thats it

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i can pay using any method the seller and i agree. alipay, TT, WU, many accept cryptos ( no KYC )


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obviosuly , you wouldn't know, you have never done trading in your life !

i just ordered a shipment of 50 x bags PVC from khi. no verification, nothing, its 'trust' based


govt wants IDs so it can tax collect, , ( it wont happen though)


the way i see it, govt and FBRs would be 'begging' people for tax in near future

#pleasefundme

 

[newb3e]

govt need to show its writ and force traders to present cnic and only make payment through registered bank account. and hopefully after collecting taxes govt invest money on traders and business and people!