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Pakistan: MCCI Finalises Income Tax Law Proposals |
| Source: |
brecorder.com |
| Source Date: |
Saturday, May 08, 2010 |
| Focus: |
ICT for MDGs
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| Country: |
Pakistan |
| Created: |
May 10, 2010 |
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The Multan Chamber of Commerce and Industry (MCCI) in its meeting chaired by Asrar Ahmed Awan finalised its proposals, recommendation and reservations on the existing income tax laws. The existing companies falling under the definition of 'Small Company' u/s 2(59) A should also be allowed the benefit of corporate tax for 20 percent and absolving them from withholding tax.
The proposal would encourage the corporate sector resulting in the documentation of the economy. 'Small Company' should also be eligible for benefits as a company registered on or after the first day of July 2005. It said that any amount received as loan, advance or gift (in cash) by an assessee otherwise than by a crossed cheque drawn on a bank or through a banking channel from a person holding NTN is deemed to be the income of the assessee u/s 39(3).
This provision is creating harassment among the taxpayers, as the tax authorities hit the transaction without going into the nature/merit. Under this section, all such cash transactions are deemed to be income, and are charged to the tax. It suggested that an appropriate provisions should be added to remove the hardship and for non-applicability if source of funds is explained/transaction is verifiable.
The MCCI said that after amendment through Finance Act 2007, retailers are being assessed under two regimes under sections 113A & 113B at new reduced rates. After this amendment they will not be entitled to claim any adjustment of withholding tax collected/deducted under any head.
It said that the existing provision is against the justice and deducted tax should be allowed to return. It suggested that under Section 114 return Forms should be introduced at least for three years to avoid the hardship and wastage of time. It said that under Section 114(2A), E-filing of income tax return and withholding tax statements and refund applications for corporate & other taxpayers is mandatory.
Presently, following are required to file their returns and in some cases withholding tax statements through e-filing system. Corporate taxpayers, persons registered for sales tax, Association of Persons (AOP), persons claiming refund even in non-company cases (application for refund also to be filed through e-mail), persons with salary income more than Rs 500,000.
In non-corporate cases it should be allowed either way of filing of returns/statements keeping in view the hardship of filling and to avoid the hardship as most non-corporate taxpayers have no access to commuters and internet, e-filing be deferred for another two years.
It said that Section 122 needs to be reviewed in the light of following situations:-After the amendment of assessment the Commissioner is empowered to again make further assessment. The extent to which the assessment can be amended has not been specified. It said that unlimited powers to Commissioners for amendment of any assessment as many times as he intends is against the justice and may lead to malpractices. Thus extent of limitation should be specified.
The MCCI suggested that under Section 130, a person may be appointed as an accountant member of ITAT if he is an officer of the Income Tax group equivalent to the rank of the Regional Commissioner or at least Commissioner or Commissioner Appeal-but it must be a chartered accountant or cost and management accountant with ten years experience in tax practice.
It said that under Section 133 of the Income Tax Ordinance 2001 provides reference to High Court where Appellate Tribunal has made an order on an appeal u/s 132. The reference be substituted with appeal to High Court to facilitate the taxpayers, as it is relatively a simple course. An additional forum of appeal will be available to the assessee.
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Pakistan: MCCI Finalises Income Tax Law Proposals The Multan Chamber of Commerce and Industry MCCI in its meeting chaired by Asrar Ahmed Awan finalised its proposals recommendation and reservations on the existing income tax laws The existing companies falling under the definition of Small Company u/s 2(59 A should also be allowed the benefit of corporate tax for 20 percent and absolving them from withholding tax
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