President Musharraf approves new tax strategy

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Karachi: A record tax collection target of Rs1 trillion is likely to be set for the new financial year.

This ambitious tax collection target will be in line with new tax strategy approved by President Pervez Musharraf.

Official sources said on Tuesday however the tax authorities would be trying their best to provide tax relief to common man during next federal budget.

Sources said besides this during next financial year, new budgetary measures will be taken to bring transport sector as a whole and retail sector under tax net.

At present from manufacturing-cum-imports to local sale, the transport sector is not contributing to national exchequer as per the share of the transport sector in national economy.

Sources said the budgetary measure for retail and transport sub-sectors will be rationalization of tax rates.

The most important measures will be empowering administrative machinery with legal authority to ensure the writ of tax collectors.

Sources said that to improve the tax compliance and collection from corporate sector four major changes have been proposed in the Statutory Auditors Report.

Under the proposed draft, the auditors of the corporate sector will certify that:

1. In our opinion, income tax deductible at source has been deducted and deposited in the treasury, as required under the income tax ordinance, 2001.

2. In our opinion, all federal taxes, which the company is required to collect or deduct under various statutes and regulations applicable to the company, have been collected, or deducted, and have been deposited in the treasury.

3. We conducted our audit in accordance with auditing standards as applicable in Pakistan.

4. These standards require that we (auditors) plan and perform the audit to obtain reasonable assurance about whether the above statements are free of any material misstatement.

An audit (of accounts) includes examination, on test basis, evidence supporting the amounts and disclosure in the above said statements.

An audit also includes assessing the accounting policies and significant estimates made by the management (of company), as well as evaluating the overall presentation of the above statements.

The auditors would therefore have to certify that their audit includes an evaluation of entity’s compliance with applicable laws and regulations.

Sources said if implemented, these regulations will improve tax compliance levels of the corporate sector of the country.

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