KARACHI (June 12 2004): The Large Taxpayer Unit (LTU) has cleared all refund claims pertaining to 2002 and efforts are being made to clear claims of 2003 by June 30. There is a backlog of Rs 3 billion in income tax refund.
LTU Director General Shahid Jamal stated this, while addressing a delegation, which visited the unit on Friday. He said that the 'failure' of the unit is due to lack of documents, especially due to multiple challans received by various departments, which hold details of payments due to the target considerations.
Talking to businessmen including S.M. Munir and Tariq Sayeed, the LTU director general said that another reason for non-disposal of cases is due to two or three interpretations of the law and the department cannot take the risk of rectification in such cases. The element of rectification is only used in case of mistakes, he added.
He said that the LTU would allow appeal in all cases by the end of this month. However there are 50 percent cases falling under the category of set aside which takes another two years for disposal.
In this regard, he formed a committee for the disposal of set aside cases and asked the officers to decide the cases by June 30.
Shahid Jamal also said that the performance of the STARR programme, a centralised automated system for processing of refund claims, is not satisfactory as sometime it reported missing entries of bills of entry and tax returns. This lead to the return to the manual exercise once again.
He said that the LTU maintained ledger accounts of the taxpayers, which contains details of all payments, made by them. The unit has requested the taxpayers to provide all documents to the unit in advance so that there is no delay in payment of refunds despite objection from the STARR programme.
The LTU director general sought help of the business community to abandon the age-old formula of collecting revenue for the sake of meeting targets. The targets should be only at the level of CBR for the sake of budget estimates. Under the present system of Universal Self-Assessment Scheme (USAS) and voluntary payment of sales tax the revenue targets have become meaningless.
He said that the department has failed in respect of collecting revenue, which is not legal.
The LTU has directed its officers to refrain from raising tax demands, which has to be refunded after two years.
Talking about the achievements made by the LTU, which collects 12.5 percent of the total national revenue and 45 percent of the total Karachi-based revenue, Shahid Jamal said that the population of taxpayers has increased from 298 cases in 2003 to 597 taxpayers in 2004-05.
The LTU collected Rs 29 billion in income tax, Rs 27 billion in sales tax and Rs 4.5 billion in excise duty by May 30 this year. It hopes to collect all revenue targets assigned to it.
Lauding the achievements of the LTU, Tariq Sayeed described the unit a perfect match of the taxpayers units of the modern world and praised the director general for being the only government official who spoke about both the success and failure of his department.
He said that the business community had always been against the concept of revenue targets, which compel the revenue officers to collect revenues by hook or crook. There is also a need for setting of such sophisticated tax units for the middle and low class taxpayers.
Tariq Sayeed also praised the LTU high-ups to bring out a mental change among the revenue officers who now collect revenue through facilitation and not by coercion.
The businessmen delegation included Manzar Alam, Anjum Ameen, Zahid Haleem Sheikh and Mian Zahid Hussain. Akhtar Jamil, former director general, LTU, was also present on the occasion.