Notices to 1.2m taxpayers not a good step: Hammad Azhar

Says efforts being made to reform tax system gradually as drastic steps could hit revenues

ISLAMABAD: The government is focused on improving and simplifying the tax system by introducing new technology to facilitate taxpayers, announced State Minister for Revenue Muhammad Hammad Azhar.

Speaking to business community at the Islamabad Chamber of Commerce and Industry (ICCI), Azhar said the best way for minimising interaction between the taxpayers and tax machinery was to employ technology and the government was making efforts to realise the goal. "This will eliminate harassment of the taxpayers and enhance their confidence," he said.

He was of the view that the Federal Board of Revenue (FBR)'s efforts to meet the high tax collection target created problems for the taxpayers. "The FBR has not taken a good step by issuing notices to 1.2 million taxpayers, which has sparked concern," he remarked.



The state minister emphasised that the government was making efforts to reform the tax system gradually as drastic measures could disturb the revenue stream.

He pointed out that the government had decided to separate areas of policymaking and tax collection and the audit function would also be separated by linking it directly with the Prime Minister's Office.

These measures would ease problems of the taxpayers and facilitate them in tax payment, he expressed the hope while acknowledging that the manufacturing sector was paying the highest amount in taxes while tax collection from services and agriculture sectors, which was the duty of provinces, was insufficient.

He assured businessmen that the government would introduce more reforms in tax matters in consultation with them.

The state minister pointed out that the government inherited the economy in a very bad shape as foreign currency reserves, trade, current account and fiscal deficits were in deplorable conditions. However, "the economy has been steered out of the insolvency mode and the future economic outlook is quite promising for the businesses."



He claimed that estimates and forecasts of all experts were presenting a good economic future for Pakistan and assured industrialists that the government would take more measures to improve the ease of doing business and promote industrialisation in the country.

Speaking on the occasion, ICCI President Ahmed Hassan Moughal said the prevailing tax system was not conducive for business and investment promotion and the government, in consultation with the private sector, should streamline it.

He was of the view that the present leadership had created a lot of hopes in people that if voted to power, it would bring drastic reforms in the FBR and increase the annual tax revenues by up to Rs800 billion. However, the government has not taken any solid measures so far to broaden the tax base.

He suggested that the government should focus on broadening the tax base and increase tax spending on education, health and public welfare, which would enhance confidence of the taxpayers.