Daily Times

The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel has called upon the government to introduce single digit tax rate in the forthcoming budget from existing 17 percent that would help in promoting the business activities and improving tax revenue as well.

The BMP Chairman and FPCCI former president Mian Anjum Nisar regretted that as per past practice the government had not taken stakeholders onboard to discuss the upcoming budget. The objectives of our budget proposals are revamping taxation system, documentation of economy, employment generation through industrialization, promoting a responsive and equitable taxation system, infrastructure development and trickledown effect of the fiscal space to the grass root level.

The Businessmen Panel fully supports the FPCCI’s recommendation of reducing sales tax rate gradually from current 17 percent to single digit, to abolish all duty and taxes on the imports of all machinery and imposition of taxes on final goods, he added. The FPCCI former president also suggested establishment of export warehouses at border for enhancement of trade with neighboring countries and bringing the agriculture and service sectors into tax net proportionately. He also proposed to increase the education and health budget for improving human capital in Pakistan.

He suggested that government should use the data of domestic and international travelers for identifying potential tax payers and bringing them into tax net.

He underlined the need of promotion of SMEs culture in Pakistan and suggested that the government should formulate mechanism for monitoring consumer goods prices.

He also requested the government to take the business community on board in finalization of agreement with IMF and highlights IMF conditionalities publicly.

Mian Anjum Nisar said that the economy of Pakistan was facing many challenges due to falling exports, rising trade and current accounts deficits and reducing foreign exchange reserves.

The Businessmen Panel Chairman endorsed the government plan of FBR reforms to expand the tax base under a fully-automated system, which should need to be improved as it has still many flaws. He said that making the FBR stronger through improved tax collection will be immensely beneficial for the country.

He said there is a need to build a structure in the country, which is in accordance with the requirements of time, as it is easy to weaken institutions but it takes a long time to rebuild them.

The main advantage of reducing sales tax to single digit will be giving relief to the common man, especially to the low and middle income group by reducing the inflation. He said that the lower rate of sales tax will increase the revenue, and discourage malpractices in input and adjustment. It will give the industry a breathing space against the menace of smuggling, which is widespread in the country. The simple procedures in sales tax will give the government an opportunity to work more efficiently within the sales tax department.

He also demanded incentives that would transform the existing infrastructure into an efficient network and bring radical changes in the society through improved socio-economic indicators.

The BMP leader also advocated for equitable taxation while emphasizing on expansion of tax net, rather than putting more burden on the existing taxpayers.

He said that the FBR acts as the backbone of our economy and its automation and integration of the data would ultimately broaden the tax base and the government would be in a position to reduce rates of taxes and lessen burden on the existing taxpayers.

The Federal Board of Revenue has introduced Fully Automated Sales Tax e-Refund (FASTER) plus system for five export-oriented sectors to promptly issue sales tax refunds to exporters by electronically Communicating Refund Payment Orders (RPOs) but the business community has also reservations on it and hopefully the officials will try to remove them.