The Federal Board of Revenue (FBR) has frozen the bank account of Abdul Aziz Memon, Chairman of the Kings Group of Companies and Trustee of The Rotary Foundation, for defaulting on capital value tax (CVT) amounting to around Rs14 million.
Memon, who is also chairman of Pakistan National Polio Plus Committee, as a taxpayer defaulted the said amount for having assets abroad.
Banking sources Wednesday confirmed that taxmen from a Karachi office had attached the bank account for the recovery.
Aziz Memon has joined the CVT defaulters’ league. Prior to this the tax office in Karachi had attached bank accounts of 50 renowned businessmen.
The information was not confirmed by the officials at the Large Taxpayers Office (LTO) Karachi. But they stated that the FBR had launched a relentless drive against defaulters of the CVT. The revenue body has recovered CVT around Rs5 billion through harsh measures across the country since January 2023. They said that further such action were underway.
Overall, the FBR also has a tough stance in recovery of amount in cases of CVT, super tax and deemed income during the last quarter of the current fiscal year.
The CVT was imposed through Finance Act, 2022 at one per cent of the value on the foreign assets of a resident individual where the value of such assets on the last day of the tax year in aggregate exceeds Rs100 million.
A senior officer at the FBR said that the CVT has been imposed on super-rich individuals. This is a direct tax that cannot be passed onto the people below income threshold, and it has to be paid by the super-rich themselves.
The official said that only 5,000 persons in the country are liable to pay this tax but interestingly around 1,200 individuals have approached courts to question constitutionality of the law. On the flip side, recently the government enhanced the sales tax rate from 17 per cent to 18 per cent, which is direct burden on the masses. But not a single public interest petition is filed.
Recently, the Managing Director of IMF has criticized this attitude of Pakistani society. There is a general perception that the law implementation mechanism is biased in favor of the elite.
