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Challan system for sales tax refund to go

KARACHI (April 11 2004): The Central Board of Revenue has planned to pay sales tax refund to exporters under an automatic procedure without involving the 'Challan system' and other officials of CBR, CBR Chairman Abdullah Yousuf said here on Saturday.

Addressing members of All Pakistan Textile Mills Association (Aptma) and answering their questions, the new Chairman of CBR assured them of change in the CBR mindset and to make it helping for the development of industries.

He said there would be no Challan system for the payment of refund. It delays the payment and costs a lot of valuable time of the exporters and industrialists, which is not required.

Under the new plan, once the remittance reaches State Bank, the sales tax refund would be directly remitted to the account of the concerned party.

He expressed confidence in the macro economic indicators, which increased the per capita income and reduced inflation and said, “We need to continue with improvement. This is the only way to reduce poverty and unemployment, the biggest challenge before the nation”.

He said the mindset of “our people” is that making money is like a sin. “There is nothing wrong if someone is making more money as he would contribute more to the national economy,” said Abdullah.

He said that World Bank's Shahid Hussain's report regarding reforms in the tax system has been adopted and some positive results like self-assessment scheme have appeared. He said that complete implementation of reforms would bring very positive response.

He said: “We are trying to simplify procedures and minimise interaction between the taxpayers and tax collecting officials. The more steps involved in the procedures more corruption and delays would happen.”

He said that CBR does not want to make fictitious amount of money, which has been a practice as the CBR officials stop making payment two months before the budget. He said no cheque or payment would be restricted for artificially boosting the collected amount as revenue.

He said: “We want to cut the unnecessary burden of paper work and remove anomalies. The system should be equitable for both, the government and the individuals.”

However, he said that there were weaknesses on the other side also (taxpayers). They should abide by the rules of the game and respect the law.

The CBR Chairman admitted that officials of CBR remain under pressure because of annual tax collection targets.

The textile industrialists were assured that he and his top officials would continue to visit Karachi for their facilitation.

Aptam Chairman Waqar Monnoo, who conducted the meeting, explained the problems of the textile industry and suggested a number of improvements to simplify the tax collecting system.

He was highly critical about the delays in payment of sales tax refund and assured that timely payment of refund could increase exports.

He said that no new plan would work unless the hardware system of the CBR was improved. He stressed fast changes in this direction. He said the huge refund of spinning units using polyester which is taxed at 20 percent, were lying blocked with various collectorates as these refunds are released after 12 months.

He suggested that the GST should be reduced to 10 percent to make the textile industry competitive under the WTO regime.

He urged that old penalties and cases should be resolved and Collectorates should be given powers to waive when principal amount is paid or to condone certain infringements.

Aptma Chairman Waqar Monnoo and other textile millers widely appreciated the plan of the new Chairman.

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