ISLAMABAD: The government would soon introduce a fixed tax regime for small traders, after which they would not be bound to collect CNIC copy on sale of more than Rs50,000, said Federal Minister for Economic Affairs Muhammad Hammad Azhar, while addressing a post-budget conference at the Islamabad Chamber of Commerce and Industry (ICCI).
However, he said, the CNIC condition would be mandatory for business-to-business (B2B) transactions and the government would not reverse the decision at any cost.
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Azhar said the contribution of retail sector to the gross domestic product (GDP) was 20%, but its share in taxes was just 0.25%. He said 80-90% of retailers were not registered with the tax department and the government was determined to bring the sector into the tax network.
The government had to increase the tax revenue by 35% during fiscal year 2019-20, he said and urged the business community to cooperate.
The minister said due to policies of the previous government, the country experienced de-industrialisation.
The current government would further strengthen the industry, he emphasised, adding that for the purpose, the duty on import of industrial machinery would be reduced in the next budget. “Forty per cent of tax revenue is collected at the import stage and the government wants to rationalise it,” he added.
Azhar pointed out that the State Bank’s policy rate was enhanced to control inflation and with the reduction in inflation, the key interest rate would also be reduced.
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Commenting on high electricity tariffs, the minister said 40% of electricity was being produced through imported fuel and the government was working to generate energy through hydel and other domestic sources, which would bring down the energy cost.
The Federal Board of Revenue (FBR) was being automated, which would minimise interaction between the taxpayers and tax collectors, he said and added that the previous government increased the circular debt to Rs453 billion in one year, while the current government would slash the debt to zero in two years.
Speaking on the occasion, ICCI President Ahmed Hassan Moughal said tax rates were high in Pakistan, due to which people were avoiding tax payments.
He emphasised that the government should address the reservations of traders about the CNIC condition. He said sales tax rate should be reduced to single digit, which would bring down the cost of doing business and inflation.
He suggested that the government should reduce duties on the import of industrial machinery in order to give a boost to industrialisation, employment, exports and tax revenue.
Published in The Express Tribune, August 2nd, 2019.
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