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IT Deptt men, tax advisers instigating traders

Three disputed

columns in IT forms

to stay: Alvi

IKRAMUL HAQ

ISLAMABAD: Strike or no strike, the three columns of personal expenses in the new income tax forms will stay, this was stated by Central Board of Revenue (CBR) Chairman Alvi Abdur Rahim here on Thursday.

Addressing a press conference on the controversial columns which have sparked agitation among the trading community, Alvi said that under the directive of the prime minister three columns out of six have already been excluded and there is going to be no change. This decision of the government is final.

The three columns which will remain on the tax returns are: (i) expenses on mobile telephone, (ii) educational expenses of children paying over Rs 500 as monthly fee and (iii) expenses on foreign trips.

The three columns already excluded are residential telephone bill, residential electricity bill and expenditure on motor car above 800cc.

Alvi said that the traders are talking of "A" and "B" income tax forms, which now do not exist. These were taken back and in their place revised returns were finalized. In the new form Annex-IX is the bone of contention. This annexure seeks information on the six items mentioned earlier.

He added that in form A and form B the department had asked information on 17 items. This was issued for comments to the Income Tax Bar Association and, in the light of adverse reactions, these were withdrawn and replaced by the new forms.

Alvi explained at length the need for revision in the forms and why such information was being sought. This inforation, he added, was vital to improving the tax system and to minimize under-reporting and misreporting.

Under the old system the assessee was asked to bring his books and documents for examination by the Income Tax Officer (ITO) and use of discretionary powers.

The new form was designed to have built-in checks against all such complaints. The mobile telephones are kept by influential and rich people and personal foreign trips, too, are made by only the affluent. These expenses do give a clue to the real income of the tax payers.

Another objection to the old system was that documents were attached with the return. Sometimes the loose documents were detached or misplaced causing confusion. The new forms take care of this eventuality.

The new forms are computer compatible and forms can be processed in no time.

He said already 6.5 lakh income tax forms have been printed at an enormous cost. The three columns which have been pended for this year are mentioned in the forms, but the tax payers will not fill them. These forms cannot be discarded only because the three columns are not relevant for this year.

Questioned that information about foreign travels and telephone expenditures could be had from other sources, Alvi said that the department has avoided this, because seeking such information from the tax payers or other sources would have again invested the income tax officer with discretionary powers which is intended to be minimized. The government policy is that the people declare their income honestly and there is minimal contact between the tax payers and Income Tax officers which is seen as a source of harrasment or use of discretionary powers.

After explaining in detail the rationale of the clauses and the need for revised tax forms, Alvi posed a question to the journalists if there was any justification for strike by the traders?

He added the decision is final - none of the three columns for personal expenditure on Annexure-IX would be withdrawn.

He said that he has also received feedback from the people. One is that the present agitation by the traders has been engineered by the department. The depatment people are keen that the scheme should not be thrown away so that the old system which allowed them to make money stays and their source of income is not disturbed.

The protest has been launched by the tax advisers because the simplification of the system would reduce their importance and eventually hurt their business.

Some have praised the new tax forms and expressed amazement why this form was not introduced earlier to check tax evasion, he said