OICCI calls for revamping tax system

Published: May 16, 2019
Representational image. PHOTO: REUTERS

Representational image. PHOTO: REUTERS

KARACHI: The transformation of tax culture will significantly boost tax collection, hence, the newly appointed Federal Board of Revenue (FBR) chairman should revamp the tax system, suggested Overseas Investors Chamber of Commerce and Industry (OICCI) President Shazia Syed.

Commenting on the appointment of Shabbar Zaidi as the FBR chief, she pointed out that he was an experienced tax professional who had been closely associated with the tax policy and administration of Pakistan for many years.

“His appointment as FBR chairman by the government is very commendable as it will substantially strengthen the FBR’s capacity,” the OICCI president said.

She was confident that with complete support of the massive and well-experienced FBR team, the new chairman would be able to steer the much-needed transformation of the tax culture and significantly boost tax collection in line with the true revenue potential of the economy. The chamber recalled that in the World Bank’s Ease of Doing Business (EODB) index for 2019, Pakistan ranked as the 17th worst country in the world on the parameter of ‘paying taxes’.

Nevertheless, the OICCI remained hopeful that with a rejuvenated FBR, supported by close coordination among provincial tax authorities and government’s clear direction to improve on the EODB front, the country would significantly improve its EODB ranking.

The recently concluded staff-level agreement between Pakistan and the International Monetary Fund (IMF) also recommended tangible actions to revamp the tax regime and boost the tax-to-GDP ratio in line with the relevant international standards, it said. The OICCI says its members, comprising leading multinationals operating in Pakistan, contribute about one-third to the total tax collection in the country.

The chamber has already submitted taxation proposals to the FBR and provincial revenue authorities for the budget for fiscal year 2019-20, which mainly focus on facilitating investment and growth in the economy.

The recommendations include the need for longer-term incentives to boost foreign direct investment in Greenfield facilities and ensuring implementation of predictable, consistent and transparent policies. The OICCI urged for revamping of the withholding tax regime from the current over 50 sub-clauses/provisions to less than 10, with a substantial reduction in the number of taxes.

The chamber expressed serious concern over the booming illicit trade, resulting in significant damage to the revenue base of the economy.

In this regard, the OICCI urged the authorities to revisit the Afghan Transit Trade Agreement, supported by structural reforms in Customs, in order to stop the availability of smuggled foreign products.

Published in The Express Tribune, May 16th, 2019.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

More in Business