Ban on old machinery and parts import may be removed

RAWALPINDI (December 16 2004): The government is planning to remove the ban on import of old and used machinery and industrial spare parts to discourage smuggling and arrest the losses being caused to national exchequer, said Abdullah Yousuf, Chairman, Central Board of Revenue (CBR), here on Wednesday. He was addressing a function of Rawalpindi Chamber of Commerce and Industry (RCCI), presided over by its president, Najam Rehan, and attended by senior executives and members of the chamber and businessmen of the area.

“This will help us to discourage the smuggling of these parts, besides growth in revenue collection through import duty on these products,” said the CBR chief, adding that this act of the government would not harm local industrialists nor would it cause any problem for local market.

“We have decided to review the tariff structure to discourage smuggling of foreign products”, he said, adding that smuggling has caused unlimited damage to the country's economy besides losses to local industrialists and business community.

“If your cost will be less than the smuggled products then why people smuggle things?” he questioned.

He said that the huge smuggling of polyester cloth is a threat to local market, and government has taken the matter seriously and given an undertaking to ICI with a guarantee till 2008. It would definitely help in arresting smuggling, he added.

About de-registration of sales tax payers, Abdullah said that people having less than Rs 5 million turnover would be de-registered, while businessmen having turnover of more than Rs 5 million would be registered. “The main ambition of CBR is to broaden tax net and remove the fears of the people regarding the tax system,”, he said.

CBR, he said, is introducing electronic tax system, which will help people to browse from their house for registration and filing of returns of their taxes. “We have streamlined the system and made it very easy for the tax payers. We want to introduce the system of 'Voluntary Declaration' in place of the 'System of Assessment',” Abdullah said.

He said a transparent electronic system in CBR would be helpful for the business community. “If businessmen file correct report, no CBR official would contact them. In case of misreporting CBR officials would contact you”, he said, adding that information is being centralised and computerised.

Talking about the issue of amnesty on sales tax, he said that a three-member committee was formed to look into the matter and resolve the issues. “Once the committee recommends to get the principal amount we will accept it”, he added.

He admitted that there were some problems in corporate sector and said that there are some ambiguities in it and a task force was formed to look into the issues. He said in the corporate sector, 43,000 companies are registered with the Securities and Exchange Commission of Pakistan (SECP) but only 11,500 companies are filing returns.

Advocating the suspension of Internal Audit System for a period of six months, the Revenue Board chief said that there were some problems in it so that it was decided to remove the ambiguities.

He assured full support to business community in tax sector and said that “until the businessman remains fair there will be no harm to him from CBR”.

He called upon the chamber office-bearers to take immediate measures to educate the businessmen about tax reforms and restore their confidence on the tax system.

Earlier, in his address Najam Rehan said that reforms of CBR in tax sector had helped in certain rise in the revenue and increased the economic growth.

He said that industrialists are facing acute problems at Chak Lala Dry Port and they are moving to other ports. “It is imperative for the authorities to take the issue seriously and remove the problems of the businessmen”, he added.

As a result of the reforms and introduction of Self Assessment Scheme there will be a huge rise in the tax payers and it has restored the confidence of the businessmen.

Chairmen of standing committees on income tax and sales tax also addressed the function and gave their suggestions regarding these taxes.

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