Govt asked to club federal, provincial taxes

FCCI says double taxation is a major hurdle in way of economic growth

Imran Rana March 10, 2019
In order to evade double taxation, most importers preferred to clear their consignments at the Karachi port and hence taxes were paid in the port city, said the FCCI acting chief. PHOTO: REUTERS

FAISALABAD: Double taxation is a major impediment to economic growth and the government must club all federal and provincial taxes in addition to limiting them to single digit, stated Faisalabad Chamber of Commerce and Industry (FCCI) Acting President Mian Tanveer Ahmed.

He was speaking to a gathering following a meeting with Punjab Finance Minister Makhdoom Hashim Jawan Bakht, which centered round the problems pertaining to the Faisalabad Dry Port Trust.

He pointed out that Karachi had its own geostrategic importance because of the seaport there. “Our imports and exports are routed through this city,” he said, adding that the Sindh government had imposed 1.15% excise duty on all imports.

After the passage of 18th Constitutional Amendment, the Punjab government also imposed the Punjab Infrastructure Development Cess at the rate of 0.9% from July 1, 2015. “This levy inflicted a severe blow to upcountry dry ports, which have now become unviable due to multiplicity of taxes,” Ahmed said.

He was of the view that in order to evade double taxation, most importers preferred to clear their consignments at the Karachi port and hence taxes were paid in the port city.

“Owing to tax collection at the Karachi port, Sindh says it contributes 70% to the total revenue collection. Thus, it receives a lion’s share in the NFC (National Finance Commission) award.”

On the other hand, Punjab and Khyber-Pakhtunkhwa (K-P) were deprived of their due share, he said.

The FCCI acting president suggested that duties and taxes paid on imports destined for Punjab and K-P, which were cleared at the Karachi port, should be included in revenue generated by the province concerned.

He asked the Punjab government to either resolve the infrastructure cess issue or withdraw the levy in order to provide upcountry dry ports a breathing space.

As the province generated Rs4 billion from the Punjab Infrastructure Development Cess, the meeting was informed that necessary data would be collected from Karachi of the import consignments cleared there.

“This will aid the Punjab government evolve a viable strategy to settle the issue,” Ahmed said.

The meeting decided that upon receipt of the data, necessary recommendations would be made in the next meeting.

Published in The Express Tribune, March 10th, 2019.

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