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Date Posted: 07:15:10 01/23/05 Sun
Subject: OVERSEAS PAKISTANIS AND TAXES
OVERSEAS PAKISTANIS AND TAXES:
By Javed - 10 January 2004
In today’s complex world no government can serve the community without income. Cent percent welfare states I think today exist only in books. Both western and oil rich states today one way or the other are reducing their welfare schemes and one way or the other directly or indirectly imposing taxes. For example it is generally said that in Europe governments give top priority to free medical aid to its citizens. Europeans eg British working in middle east tell that free medical aid and care is old stories today. The other day a British columnist working in middle east narrated a dark picture of hospials in UK. Oil rich states have reduced medical facilities and are imposing fees which of course is a sort of tax. Pakistan is not a developed country hence the government has no other choice but to impose income tax. What is system of tax collection, tax policies, ever increasing burden on weaker segments, tax evasion with help of those who matter etc are not topic here. The issue resticted is income tax and Overseas Pakistanis (OPs).
2. I came abroad in 1983. I learnt OPs were exempt from payment of any income tax in Pakistan. Since 1983 from each article, speech, statements from different rulers of time, policy statements, Ops Conventions, newspapers like others I always gathered that there was no income tax of any sort on OPs. So far I have not met any person abroad who had an understanding to the contrary. Though I have heard some stories tax staff (which tax staff?) Visiting Ops homes and enquiring about taxes paid.
3. On 20.8.2003 a news item appeared in press saying “CBR plans to save expatriates from double taxation”. According to it our Government was giving final shape to an agreement for saving Pakistani workers in Saudi Arabia, Cyprus and Russia from doubale taxation on their income. The news further stated Saudi Arabia has introduced a new tax on expatriates salaries which would be of greatest concern of Pakistanis as most of the work force from here (Pakistan) is engaged there. Saudi officials are due in Islamabad for finalising agreement for avoidance of double taxation between and these two countries.
4. When OPs are always given an understanding or an impression that they are exempt from payment of taxes on their earnings abroad then if in Saudi Arabia a tax on salaries has been levied which in other world is Saudi Income Tax then why should it be of any concern to Pakistani tax authorities or to OPs themselves as they are exempt from payment of income tax in Pakistan on their foreign earnings or remitttances. Hence logicaly then from where “double” taxation question arises for which government was negotiating agreement?
5. On 02.09.2001 meeting a 7 member delegation of Associations of Builders & Developers in Karachi, the Finance Minister Mr. Shaukat Aziz stated that in order to attract OPs for making investment in housing sector, the Government has exempted them from payment of “ANY TYPE OF TAX” on their purchases of flats, houses and other properties. Last year I read a complaint appearing in newspapers from a Pakistani serving in Saudi Arabia that during his visit home in Tehsil Rawalpindi people visited him demanding to pay them tax on his property. The complainant quoted a big amount. When he asked the visiting people to issue him necessary Demand Forms so he could deposit the same into bank, the amount was allegedly decreased and further reduced. The OP in his press complaint duly gave name of people who came to demand this amount. Being a law abiding person he deposited the amount in Bank and according to his complaint same people were now harrassing his family.
6. This press complaint surprised me because based on the statement of Finance Minister I had in my mind that we the Ops were exempt form payment of all sorts of taxes on our properties in Pakistan. To know the exact situation I addressed Chief Nazim of concerned Tehsil both directly and through OPF too. Tehsil authrities never gave any response.
7. I am a big fool unfit for today’s society because I am a so-called “Shareef” Adamee (a coward/buzdal in other word). I have throughout my life paid all government dues well in advance. For example sitting abroad I always paid timely in advance my radio licence fee whereas millions sitting home never paid. Accordingly whenever new government of the time raised a new slogan to catch the tax evadors, very foolishly almost each time I requested the income tax/CBR to kindly apprise and inform me in plain simple language if being an Overseas Pakistani I was required to file any Income Tax Return or pay any taxe. In return after much reminders each time I got some copy pages of some Rules and Laws from here and there saying under clause so and so it is so and so, and under rule so and so it is so and so. Where are those so and so, I could not find. Every one of us knows well that laws and law books always give reference to any other law or clause printed in some other book or SRO/Notification and one single law/book never gives complete exhuastive final full story to a lay man. Despite my repeated requests at different levels including OPF I never got any simple plain language answer if being an OP I was to pay income tax or not and if I am to file income tax return then has these return forms been supplied to any Pakistan Embassy abroad. In (perhaps) 1999 when there was a lot hue and cry over cancealed tax I again requested CBR to please let me know in simple plain language if I am to file return and if so to send me a few Forms which I may also give to other friends here. In return I do remember I got similar technical legal language copies giving references of other clauses somewhere else together with photo copy of a Form. Instead of Income Tax Return Form it was some sort of an Amnesty Form (exact form heading I do not remember now). Government of Pakistan’s appointed Member Overseas Pakistanis Advisory Committee also wrote to concerned requesting authenticated information so that in his weekly community meeting he may apprise OPs to take necessary action. He too got same copies which I got. The most shameful was that the photocopy of Form which both myself and Member OPF Advisory Committee & Chairman Pakistan Club separately got was photocopy from a same single Form already filled in and filed by some other person in Pakistan. The authorities could not send us a blank Form even though it was wrong form. All of us know it is too difficult to erase already filled in information in today’s different forms generally having small computerised boxes to make it a blank form.
8. Recently a news item appeared that CBR was tightening its noose to bring more people under tax net and it was going to check certain categories including those who have telephones. In my Pakistan resience I have telephone which is in my name. I am paying all the bills of this telephone. I work abroad, I send home to my father who deposits my Bills. Being a “Shareef” Adamee I contacted the concerned authorities telling them that I have telephone at my Pakistan home which is in my name but all my income is through my earning abroad (ecept for maximum about Rs. 15,000 per year in Pakistan through national savings) do I need to file an Income Tax return. In return in I have in writing been informed that Law reqires that certain persons should file a return of income (though their income may not be taxable) including those who have a telephone. As such I have been informed that since I have a telephone I am reqired to file a Return and for the delayed submission I have separately to write a Petition to concerned Income Tax Officer for condoing the delay. The last date for filing returns was 30.09.2003.
9. My question to all Overseas Pakistanis is have you during your 5, 10, 20, 25 years stay abroad ever heard that you are required to file yearly any income tax returns? Half of you must have a house, a car, a phone etc back home. Don’t tell me this is rule written in that yellow covered book available with so and so publisher. Tell me has any Embassy where you work, any Pakisstan Association, your so-called collective welfare organisation OPF, any visiting Minister, any Ops TV/Radio programme told you that you were required to file income tax returns or pay income tax. They always told you as blanket you were exempt form payment of income tax. Have you ever seen any leaftlet or brochure on this subject prepared for you by any of those. About two years back when I approached Tax Ombudsman I got a response from income tax that I can get all information from web site. Atleast till 12 January 2004 I could not find any information to the point re: OPs to file their income tax returns and pay income tax except that with reference to Overseas Pakistanis on the web there is inforamation about what is said as “incentives”. In no way this be treated any sort of criticism. Pakistan is our country. Due to Pakistan we have the honour to work abroad. This country has enabled us that tody we are required aborad. Payment of any tax is our duty. But point is at least we should be clearly told and guided in a proper manner.
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