Businessmen demand streamlining of tax regime
PHOTO: REUTERS
Businessmen have urged the government to streamline the complex tax regime in the budget for 2021-22 along with incentivising taxpayers through measures aimed at steering ease of doing business and ensuring filing of tax returns by all income earners.
In their budget proposals, members of the Overseas Investors Chamber of Commerce and Industry (OICCI) called for rationalisation of the minimum tax regime with the reduction in general tax rate to 0.2% for certain industries such as oil refining and oil marketing companies.
“The final tax regime should be abolished and all withholding taxes should be adjusted,” said OICCI President Irfan Siddiqui in a statement on Wednesday. “The Federal Board of Revenue (FBR) should ensure that those who are subjected to withholding taxes file regular tax returns.”
OICCI Secretary General Abdul Aleem stressed that the country needed to introduce a unified sales tax rate of 13% as applicable in Sindh.
He also demanded the introduction of a common tax return form throughout the country so that traders could file tax returns with the FBR just once instead of filing separate sales tax returns in every province.
He pointed out that the 2% income tax rebate for Shariah-compliant investment had been ineffective.
“We recommend a substantial increase in the federal excise duty on unmanufactured tobacco to arrest the massive tax evasion in the tobacco sector,” said Aleem. “This and introduction of a track and trace system will boost FBR’s revenue significantly.”
The chamber also proposed that stringent measures should be taken and penalties imposed on illicit trade across the entire value chain.
It underlined the need for harmonising duty and tax rates in the pending review and revision of the Afghan Transit Trade Agreement (ATTA) to check tax evasion.
Highlighting the need for improving ease of doing business and promoting tax culture, the OICCI recommended the simplification of tax regime coupled with reduction in the number of tax payments and filing of various forms and returns.
“Pending tax refunds should be settled within 45 days and inter-adjustment of income/sales tax refunds should be allowed,” he said.
“In line with the focus on digitisation, the FBR and associated tax authorities need to substantially upgrade their digital technologies and data analytics, and utilise artificial intelligence tools to effectively use a strong database already maintained by the National Database and Registration Authority (NADRA).”
Published in The Express Tribune, April 1st, 2021.
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