ISLAMABAD: Finance Minister Shaukat Tarin on Friday announced to restore Universal Self Assessment Scheme (USAS) in actual form to facilitate tax return filers.
While presenting federal budget 2021/2022, the finance minister said that the lynchpin of economic policy would be resource mobilisation, especially tax revenues. We plan to fundamentally restructure the taxation regime and working of tax administration.
These initiatives are the need of the hour as there are serious issues of public trust and confidence in our tax system.
The proposed tax policy will emphasize on expansion of tax bases through identification of new taxpayers, gradual removal of exemptions and concessionary provisions and reduction in tax rates. We would also protect the existing taxpayers so that no further burden is placed on their tax liabilities.
At the outset our tax policy would be based on the following principles:
We will restore the purity of self-assessment scheme, which would mean that except when there is any “definitive information” contrary to the information disclosed in a tax return, all tax returns shall be deemed as assessment orders;
The returns under self-assessment scheme would only be subjected to audit once they are chosen through an automated risk-based selection procedure;
Furthermore, we would make use of outside auditors for carrying out the audit, which will be done remotely through an e-Audit system;
These audits would be very serious and wilful evasion shall be considered a criminal offense carrying a jail term;
We will strive to hit hard on harassment of taxpayers;
The two taxes; tax on income and tax on consumption, would be the primary instruments of tax mobilisation;
We will reorient the tax machinery to go after tax evaders, identify those who are outside the tax net when they should be inside, and make extensive use of information technology to detect prospective taxpayers and reach out to them through the use of electronic communications, thereby eliminating personal contact with the taxpayers;
Progressivity in taxation shall be further strengthened – the rich will be asked to pay their due share in taxes.
Exemptions available to powerful groups shall be removed;
No new taxes shall be imposed on the salaried class;
The system of track and trace will be implemented initially with four industries but would be expanded to the full spectrum of industrial and trading activities;
A major plank of our strategy would be the expansion of GST base. In this regard, we would bring into the tax net all retail and wholesale transactions which are using emerging and evolving digital and electronic payment systems. To this effect, we would help traders install the point-of-sale (POS) equipment and link it up to the FBR system.