KARACHI (April 23 2003) : The Central Board of Revenue (CBR) has indicated to set up a green channel for clearance of invoices without any scrutiny for speedy payment of sales tax refund.
This was stated by the CBR member, Sales Tax, Ramazan Bhatti, at the dinner hosted for him by the Chairman, Rice Exporters Association of Pakistan (Reap), Abdul Rahim Janoo.
He asked the trade associations to give names of the businessmen, who were honest and had a clean record of dealings.
The names of these “white suppliers” would be fed into the Green Channel and invoices issued by them for refund would not be questioned.
Responding to the point for permission to allow duty-free import of machinery for processing and packaging of rice, Ramazan Bhatti advised the Reap members to enlist themselves under the Duty and Tax Remission Rules for Export (DTRE), which allowed zero-rated import of machinery and purchase of raw material.
He, however, said that the CBR was considering a scheme under which the machinery used for manufacturing of 80 to 90 percent of the export goods would be exempted from import duty.
He cited the example of duty-free purchase of cotton by the yarn spinners, who were getting themselves, registered with the DTRE in large numbers.
Ramazan Bhatti said that he was greatly concerned over the registration of wrong and dishonest persons under the Sales Tax regime, who used their registration to issue fake invoices.
He asked the trade associations to help the CBR in tackling with the problem of registration and de-registration.
The Suppliers, blacklisted, in one city moved to another city and got him registered under a new name and engage in the malpractice of false invoices, he added.
He said that the refund system had been fully computerised and the first instalment of cheques for refund claims, processed on a centralised computer network, would be issued in a fortnight.
The CBR had decided to shift the function of filing and processing of refund claims of their members to different associations, he said, adding they would send the processed refund claims in hundreds to the CBR, which would issue the cheques.
About the audit, he said that the CBR was ready to fix a benchmark of yearly tax for different sectors in consultation with the trade.
The business entities, meeting the benchmark, would be audited once in three or five years as the case may be.
In Pakistan, of the 152,000 registered taxpayers, only 52,000 paid tax, he added.
The CBR had started computerisation of the audit system, which would forbid the auditors to visit the business premises and instead accounts, submitted through a diskette, would be analysed electronically, he said.
Ramazan Bhatti said to lessen the problems of businessmen regarding taxation, the CBR had offered trade bodies to set up a committee to discuss and resolve tax disputes, involving arrears of sales tax.
He cited the example of one such committee, which was chaired by a leading businessman, Raees Ashraf Tar Mohammad, which reduced the tax arrears of millions of rupees into hundred thousands.
Bhatti paid rich tributes to the Karachi businessmen for maintaining a tax culture far better than in vogue in other cities.
He praised Rahim Janoo for his leadership of Reap, which had boosted the export of quality rice totally eliminating claims against sub-standard quality of rice exported.
He said that during his tenure of the Reap not a single export consignment had been rejected.
Speaking at the dinner, Raees Ashraf Tar Mohammad, praised the dedication and honesty of Ramazan Bhatti, who spent most of his tenure in the CBR in Karachi Customs.
He, however, complained that the policies were not being implemented honestly by the lower staff in the sales tax collectorates, who tried to make a deal with the businessman when they approached them for registration or persuasion of refund claims.
He said that as a result of dishonesty of auditors and inspectors of Sales Tax, a huge amount of sales tax was being evaded through bogus registration and other spurious dealings.
This had made the functioning of honest businessmen very difficult and they had no option other than either quit the business or indulge in corruption as sought by the lower CBR staff.
The diner was attended by a good number of business leaders, which included Yahya Polani, Majyd Aziz, Ibrahim Panwala, Qasim Parekh, Hanif Lakhani, Haneef Janoo, S.M. Naseer, M.A. Sattar, Tahir Khaliq, and Haji Kassam.
