Business

Budget 2015-16: Dar’s budget defies economic vision, says KCCI

Chamber criticises increased indirect taxes.

Our Correspondent June 13, 2015

A new form of Income Tax (Withholding Tax) across the board has been introduced by imposing 0.6% on all banking transactions. PHOTO: PID

KARACHI: The budget 2015-16 has major relief measures for the agriculture, corporate sector and for the industries in Khyber-Pakhtunkhwa, but it has brought an additional burden of indirect taxes, Karachi Chamber of Commerce and Industry (KCCI) stated on Friday.

On the positive side, the Federal Board of Revenue (FBR) has been deprived of powers to issue exemptions under various provisions and these powers have been transferred to the parliament. This, to some extent, will plug the leakages and reduce the level of inherent corruption associated with such powers, a KCCI press release said.

A new form of Income Tax (Withholding Tax) across the board has been introduced by imposing 0.6% on all banking transactions and instruments issued by non-filers which is aimed at broadening the tax base.

By the virtue of this tax, the FBR has put the burden of netting non-filers on registered persons, which is unlikely to bring the desired results. It will only add to the cost of doing business that would be passed on to the consumers.

Unfortunately, the recommendations of KCCI, which represents the largest number of tax payers in the country, have by and large been ignored in the budget 2015-16, particularly the most important demand of the business community to repeal or amend the draconian provisions in the sales tax, income tax and customs laws to curtail the absolute discretionary powers of the officers of Inland Revenue, added the chamber’s statement.

The government has heavily relied on indirect taxes and avoided difficult and bold decisions to support the economic vision of the leadership. The plan to develop China-Pakistan Economic Corridor is indeed a far-sighted geo-strategic move, but ironically it is not supported by the current taxation regime which is still decades behind. It remains to be seen how the parliament debates these measures and comes up with the necessary changes to make it more people friendly, added the KCCI.

Published in The Express Tribune, June 13^th, 2015.

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