Prime Minister Imran Khan should voluntarily announce the reason for a considerable increase in his tax payment during the tax year 2019 against the tax paid in the tax year 2018, says noted tax lawyer Waheed Shahzad Butt.

Speaking as a guest in “Paisa Bolta Hai” with Anjum Ibrahim on Aaj News, here on Sunday, Butt stated that the prime minister has paid tax of Rs9,854,959 during the tax year 2019 against Rs282,449 paid in the tax year 2018, reflecting an increase of Rs9,572,510. The prime minister should himself announce the reason for the increase in his tax payments, he suggested. “We cannot assume from which source the income has been generated. There must be a background of this increase in tax payment by the prime minister.”

The Election Commission of Pakistan (ECP) used to put the details of the assets declarations of the Parliamentarians on its website but the information has been removed from it. The assets declaration contains complete information about the assets of the candidate, his spouse, and income details, etc, which should be available on the ECP website, he maintained.

In the previous format of the tax directory, only the amount of tax paid by the parliamentarians was reflected. Now, additional columns have been added to show the income under various categories, i.e., normal, presumptive, AOPs, and agriculture. However, had the FBR also specified heads of property income, capital gains, dividend/ royalty, salary income, business income and income from other sources, this controversy would not have emerged, Waheed added.

However, former finance minister Dr Salman Shah stated that the parliamentarians should pay their due taxes. A number of parliamentarians do not file their income tax returns and others avoid actual income and tax payments by using various tax laws. The mini-budget, i.e., the Finance (Supplementary) Act, 2022 was not introduced for generation of taxes but for the documentation purposes.

Dr Salman Shah added that the cartels and mafias may increase prices in the name of ‘mini-budget’, but the Competition Commission of Pakistan (CCP) has failed to break the cartels due to litigation in courts.

Dr Abid Qaiyum Suleri, Executive Director, Sustainable Development Policy Institute (SDPI) stated that the PM and other parliamentarians have declared their sources in the income tax returns filed with the FBR. When the return is submitted along with nomination papers with the ECP, sources of income would be available.

He stated that the policy distortions were needed to be removed from the tax laws. The FBR has withdrawn sales tax exemptions to remove distortions in the tax system. During the tenure of the Pakistan People’s Party (PPP), the then government tried to remove distortions in the tax system, but they failed to do so. The withdrawal of sales tax exemptions is a step in the right direction for the documentation of the economy and the harmonisation of taxes, the executive director SDPI maintained.

The government has to give administrative and operational autonomy to the State Bank of Pakistan (SBP) being the regulator. The State Bank of Pakistan (Amendment) Bill, 2021 passed from the National Assembly has incorporated the recommendations of the Standing Committee that dual nationals cannot become the governor of the SBP and the governor cannot work at any multilateral and financial institution for two years period after completion of his tenure, Dr Suleri added.

Waheed Shahzad Butt stated that the mindset of the tax officials needs to be changed as refund is the right of a taxpayer.

This report was first published in Business Recorder on Jan 17, 2022.