ICCI demands single sales tax return

Calls minimum tax of 1.25% very high for businesses

ISLAMABAD:

The government should assign the task of sales tax collection across the country to the Federal Board of Revenue (FBR), demanded Islamabad Chamber of Commerce and Industry (ICCI) President Muhammad Shakeel Munir.

Talking to the business community, he said that the government should introduce a single sales tax return in the upcoming budget for the taxpayers providing services in the Centre and provinces, which would facilitate the business community.

He highlighted that provinces were collecting their own sales tax on services and businesses working in all the provinces were required to comply with orders of five tax authorities, which was a hurdle in the way of promoting business activities.

“Introduction of a single sales tax return for the whole country will reduce the compliance cost for taxpayers and promote ease of doing business, besides integrating the sales tax collection system,” said Munir.

He suggested that there should be no concept of minimum tax and tax should be collected on actual profits.

The ICCI president pointed out that the minimum tax rate had been reduced to 0.25% for fast-moving consumer goods (FMCGs) but for other businesses, the rate was still high.

“This rate should not be more than 0.5% for all sectors other than FMCGs,” he said. “The minimum tax of 1.25% is too high for all types of businesses, which should be reduced to 0.5% and collected on profit basis.”

He stressed that the tax should always be collected on income basis and not turnover basis.

ICCI Senior Vice President Jamshaid Akhtar Sheikh and Vice President Muhammad Faheem Khan said that currently the tax rate was 35% on the last slab of rental income, which was very high.

They stressed that the government in the upcoming budget should bring down the tax rate on rental income to 10% as the high tax rate promoted tax evasion besides hiking rents for businesses and companies.

“Reducing this tax to 10% will promote tax culture, reduce rents of shops and offices, and improve tax revenue for the government as well,” he said.

Published in The Express Tribune, May 1^st, 2022.

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