The Federal Board of Revenue (FBR) suspended the bank account of Abdul Aziz Memon, Chairman of the Kings Group of Companies and Trustee of The Rotary Foundation, for failing to pay approximately Rs14 million in capital value tax (CVT).
As a taxpayer with foreign assets, Memon, who is also chairman of the Pakistan National Polio Plus Committee, failed to pay the specified amount.
Wednesday, banking sources verified that tax officials from a Karachi office had attached the bank account for the purpose of recovery.
Aziz Memon has joined the league of CVT defaulters. Previously, the tax office in Karachi had frozen the bank accounts of fifty prominent merchants.
Officials at the Large Taxpayers Office (LTO) in Karachi were unable to confirm the information. However, they reported that the FBR had launched a relentless campaign against CVT defaulters. Since January 2023, the revenue body has recovered approximately Rs5 billion in CVT through severe measures across the nation. They stated that similar actions were being taken again.
During the final three months of the current fiscal year, the FBR takes a tough position on the recovery of amounts owed for CVT, super tax, and deemed income.
Through the Finance Act of 2022, the CVT was imposed at 1% of the value of a domiciled individual’s foreign assets whose aggregate value on the last day of the tax year exceeded Rs100 million.
A senior officer at the FBR stated that the CVT has been imposed on individuals with extraordinary wealth. This is a direct tax that cannot be passed on to the impoverished; the ultra-wealthy must pay it themselves.
According to the official, only 5,000 people in the country are required to pay this levy; however, approximately 1,200 individuals have challenged the constitutionality of the law in court. On the other hand, the government recently increased the sales tax rate from 17% to 18%, which is a direct burden on the populace. However, no public interest petitions are lodged.
Recently, the managing director of the IMF has criticised the Pakistani society’s attitude. It is widely believed that the law enforcement mechanism is biassed in favour of the elite.
