Govt urged to broaden tax base

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI), in its proposals for the federal budget, has urged the government to effectively use a sales tax scheme to broaden the tax base.

It suggested that the standard sales tax rate be brought down to 7%, it should be non-adjustable and non-refundable, collected at the single stage of import and/or manufacturing, except for high tax-contributing sectors like petroleum, energy, telecom and tobacco.



“In the value-added chain, it may be collected at 0.5% at each stage of value addition.”

However, it said since the single-digit sales tax would require a lot of time for massive amendments to the Sales Tax Act 1990, the standard sales tax may be reduced to 15% in VAT mode at the first stage and thereafter be cut gradually by 1% annually.



The proposals are part of the FPCCI presentation being prepared under the chairmanship of Syed Mazhar Ali Nasir, FPCCI Senior Vice President, and would be presented to the ministries of finance and commerce and the FBR for incorporation in the federal budget 2018-19.

Published in The Express Tribune, March 16^th, 2018.

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