Q&A with Rai Muhammad Kashif, Advocate High Court and Chartered Accountant
Interviewer: What is tax?
Interviewee: A tax is a charge, usually a charge of money, imposed by an authority on persons or property for public purposes.
Q: I have heard that tax isn’t applicable on a residential area of 5 marlas or less. Why is that so?
A: This is because in Pakistan, the government by not collecting taxes on such property gives relief to people who can only afford as much. However, tax will definitely apply in case of a commercial plot of 5 marlas. Similarly, tax also applies if we rent out a residential area of 5 marlas.
Q: What is the difference between residential property and commercial property?
A: Residential property is let to consumers while commercial property is let to businesses.
Q: Can you define the terminologies benchmark rate, services and utilities under tax law?
A: As an example, benchmark rate means, for the tax year commencing the first day of July, 2002, a rate of five per cent per annum. Services are any kind of facilities under taxation law. Utilities are basic needs, for example, electricity, water and telephone. Taxes are always applicable on utilities.
Q: What is the role of FBR (Federal Board of Revenue) with regard to taxation?
A: FBR is a semi-autonomous federal entity of Pakistan which is responsible for enforcing fiscal laws and collecting revenue for the government of Pakistan. FBR primarily operates through its main collection arms consisting of regional tax offices (RTOs) and large taxpayer units (LTUs) across the country.
Q: Does the field of tax law require any reforms?
A: Firstly, for the government to increase its revenue, it should apply taxes on agricultural land as well. Secondly, sales tax should be decreased by at least 3-4%. Thirdly, and most importantly, more relief should be given to those who actually do pay taxes.
Q: What do you suggest for people who don’t pay taxes properly?
A: It is totally immoral and illegal. Taxes should be paid properly and on time. Tax revenue can upgrade our education and health sectors as well as address the country’s financial problems.
Q: How has your experience been in the field of tax law?
A: It has been excellent so far. I believe that it is also necessary to create awareness about taxation among the people.
The views expressed in this article are those of the author and do not necessarily represent the views of CourtingTheLaw.com or any other organization with which he might be associated.