In-depth analysis of Budget 2019-20.

• Position: Interview

Interview with Mr Ashfaq Yousuf Tola - a renowned tax expert

Pakistan and Gulf Economist had an exclusive conversation with Mr Ashfaq Yousuf Tola regarding Budget 2019-20. Excerpts of the conversation with him are as follows:

Finance Bill 2019-20 (The Bill) for the fiscal year 2019-20 was laid before National Assembly on 11th June 2019. The bill has proposed amendments in Income Tax Ordinance, 2001 (ITO), Sales Tax Act, 1990 (STA) and Federal Excise Act, 2005 (FEA) among other laws.

About Income Tax:

The bill proposes to abolish the concepts of 'Filer' and 'Non filer' and has instead introduced rules in form of tenth schedule for persons not appearing in active taxpayer list i.e. persons currently termed as non-filers. The bill proposes that tax collections/deductions from payments to such persons shall be 100% more than the normal rates. The bill proposes that where the withholding agent is satisfied that the person is not required to file his return of income, the agent shall furnish a notice in writing to the commissioner giving required particulars.

The commissioner shall make a decision within 30 days of notice. Where the commissioner is of the opinion that the person is required to file return of income, he shall order the withholding agent to deduct tax at 100% more than the normal rates. In case no decision is made within 30 days, approval by the commissioner shall be treated to have been granted. The bill also proposes to empower commissioner to make a provisional assessment order of the person within 60 days of due date of filing of return of income if he does not file return of income within due date. The commissioner shall impute taxable income on the basis of taxes deducted and shall treat such imputable income as concealed income under section 111.

The provisional assessment shall become abated if the person files return of income of relevant tax year and preceding tax year within 45 days of receipt of provisional assessment order, otherwise the provisional assessment shall become final and the commissioner may within 30 days initiate proceedigs for imposition of penalty and concealment of income.

The bill proposes to restrict purchase of immovable property, having FBR valuations more than Rs. 5 million, and other assets valuing more than Rs. 1 million, other than through normal banking channel. The bill proposes that in case transaction is undertaken otherwise through banking channel, the purchaser will not be eligible to...