The Islamabad Chamber of Commerce & Industry (ICCI) has said that the government should assign collection of sales tax across the country to the Federal Board of Revenue (FBR) and introduce a single sales tax return form in the upcoming budget to facilitate the business community.
ICCI President Muhammad Shakeel Munir said this while addressing an Iftar dinner hosted by Ch Abdul Rauf, Fair Group of Companies Chairman, said a press statement issued on Sunday.
Jamshaid Akhtar Sheikh Senior Vice President, Muhammad Faheem Khan Vice President ICCI, Zubair Ahmed Malik, Khalid Javed, Muhammad Ejaz Abbasi, Baser Daud, Sheikh Aamir Waheed, Muhammad Naveed Malik, Ch Masood, Ashfaq Chatha, Tahir Abbasi, Ch Tahir Mehmood, Abdul Noor and others were present at the occasion.
Shakeel Munir said that provinces are collecting their own sales tax on services and businesses working in all the provinces are required to make compliance with 5 tax authorities which is a hurdle in promoting business activities.
He said that introduction of a single sales tax return for the whole country will reduce the compliance cost for taxpayers and promote ease of doing business besides integrating the sales tax collection system. He said that there should be no concept of minimum tax and tax should be collected on actual profits.
He said that the minimum tax rate has been decreased to 0.25pc for fast moving consumer goods (FMCGs) but for other businesses, this rate is still high. He proposed that this rate should not be more than 0.5pc for all sectors other than FMCGs. He further said that the minimum tax of 1.25pc is too high for all types of businesses, which should be reduced to 0.5pc and collected on a profit basis. He stressed that the tax should always be collected on income basis and not turnover basis.
Jamshaid Akhtar Sheikh and Muhammad Faheem Khan said that currently the tax rate is 35pc on the last slab of rental income, which is very high. They stressed that the government in the upcoming budget should bring down the tax rate on rental income to at least 10 percent as the high tax rate on rental income promotes tax evasion besides hiking rents for businesses and companies.
They said that reducing this tax rate to 10 percent would promote tax culture, reduce rents of shops and offices and improve tax revenue for the government as well.