Loud Thinking

An open letter to the PM Pakistan

Mr. Prime Minister Please Don’t Allow to Open the Corruption Flood Gate

SALARY
[Section 149]
The responsibility for withholding tax from salary has now been extended to any “person
responsible for” paying salary. Previously, it was only the “employer” who was
responsible for the withholding.

It is now proposed not to consider the following, whilst determining tax to be withheld
from salary payments:
a) Charitable donations;
b) Tax credit for investment in shares and insurance;
c) Contribution to an “Approved Pension Fund”; and
d) Profit paid on loan utilized for construction of a new house or acquisition of a house.

As a result, the salaried individuals will claim the above tax credits in their returns, which
may result in refund.

H’able Mian Nawaz Sharif Sahab

Salaam.

Above is the extract of relevant section on income tax proposing change in the method of availing tax rebate on investments by salaried class of tax payers.

This may look very innocent apparently, but is a clear cut reminder that the bureaucracy has tricked the PMLN government in opening a big flood gate of corruption. Who does not know in Pakistan that receiving legitimate claim from FBR require payment of at least 40% to its functionaries. With this amendment, all law abiding tax payers will be put on the mercy of FBR for claiming rebate on investment. Knowing how FBR functions, this rebate will take years, not months, to realize. And that too after paying at least 40% of rebate amount as bribe to FBR.

By allowing this change, Mr. Ishaq Dar will be remembered (although he is not in the knowledge of this trick, which was confirmed with his statement today on 17 June, 2013, in Geo TV program “Capital Talk” of Hamid Mir, when he said at 8.35 PM that people can deduct allowed rebate from the taxable amount at the time of submitting yearly I.T returns), as one, who has provided superb and golden opportunity to FBR officials for grabbing money from salaried class of income tax payers.

There is still time for PMLN to protect its image and restore the true self-assessment scheme in letter and spirit for salaried class of income tax payers. FBR can always scrutinize any suspicious returns, if they want to catch cheaters. Why penalize a huge lot of good people for the fault of few bad people. FBR should set its own house in order first and catch non-filers, instead of harassing honest tax payers.

They can design many methods to confirm legitimacy of investment but the goal should be to minimize contact between FBR officials and honest tax payers.

Justice delayed is justice denied. If tax payer cannot take rebate of investment when investment is made (same year), then it is no rebate. It is then much better to announce withdrawal of all rebates on income tax. Period.

Syed Nayyar Uddin Ahmad
Lahore.

Sent from my iPad3 4G LTE