Businessmen have called upon the government to reinstate the single digit tax rate in the upcoming budget to encourage business activities in the country.
In a statement on Saturday, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) former president Anjum Nisar requested the government to reduce the tax rate from existing 17% to a single digit, which would help steer ease of doing business and enhance tax revenue.
“Just like its past practices, the government has not taken stakeholders on board to discuss the upcoming budget proposals,” he said. “Our budget recommendations include revamping taxation system, documentation of economy, employment generation through industrialisation, promoting a responsive and equitable taxation system and infrastructure development.”
Endorsing FPCCI’s recommendations, Pakistan Industrial and Traders Associations Front (PIAF) Chairman Mian Nauman Kabir called for elimination of all duties and taxes on import of machinery.
Instead, he suggested imposition of taxes on final goods.
He also recommended setting up of export warehouses at the borders to uplift trade with neighbouring countries and bringing the agriculture and service sectors into the tax net. He also demanded enhancing the education and health budget for improving human capital of Pakistan.
Pakistan Pharmaceutical Manufacturers Association (PPMA) former chairman Shahzeb Akram underlined the need for promotion of small and medium enterprises (SMEs) in Pakistan and advised the government to formulate mechanism for monitoring prices of consumer goods.
He also requested the government to take the business community on board prior to the finalisation of agreement with IMF and reveal conditions of the global lender to the public.
“Pakistan’s economy is facing many challenges due to declining exports, widening trade and current accounts deficits and falling foreign exchange reserves,” he said.
He said that the lower rate of sales tax will increase revenue and discourage malpractices in input and adjustment. It will give the industry a breathing space against the menace of smuggling.
The official also demanded incentives that would transform the existing infrastructure into an efficient network and bring radical changes in the society through improved socio-economic indicators.
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While appreciating the government’s reform plan for the Federal Board of Revenue (FBR), Nisar said the automated system needs to be improved, citing that multiple flaws existed in it.
In this regard, Kabir termed equitable taxation a must for expansion of the tax net rather than placing more burden on the existing taxpayers.
Published in The Express Tribune, March 28th, 2021.