All the buzz about financial inclusion is interesting. Yes, we are uplifting the masses and improving lives. But, as we include people, we also add documentation on income. Income can be taxed.
Here is an interesting read from Pakistan Today.
- The Federal Board of Revenue (FBR) has received details of all bank accounts from which withholding tax is being deducted, and scrutiny is being conducted to bring the non-filers into the tax base.
- The data bank developed with the help of NADRA possessed all kinds of data about potential non-filers, but it lacked banks data. The FBR is now confident that the data of withholding deductions would help the tax machinery in launching a pilot project from July 1, 2019, for broadening of the tax base.
- a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees one hundred thousand or more during the preceding calendar
- The FBR had sought the cooperation from the central bank after it found out that hardly 10% of over 50 million bank account holders were income tax filers. “The existing legal framework provides constraints on procuring and sharing of privilege/confidential information relating to the affairs of the banks’ customers,” the SBP wrote to the FBR.
100,000 Pakistan rupee equal about $600.
Only 3% of the country have credit cards, and 8% have debit cards. With almost 200 million people in the country and a per capita income of only $1,500, there is a long way to go.
Hopefully, the top income producers, those with the cards, won’t curtail inclusion as the tax man cometh.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group