LCCI warns of Rs1tr revenue shortfall

LCCI warns of Rs1 trillion revenue shortfall, urging tax reform and technology-driven solutions.

LAHORE:

The Lahore Chamber of Commerce and Industry (LCCI) has warned of a potential revenue shortfall exceeding Rs1 trillion by the end of the fiscal year, according to a press statement issued on Monday.

LCCI President Mian Abuzar Shad, Senior Vice President Engineer Khalid Usman, and Vice President Shahid Nazir Chaudhry said the Federal Board of Revenue (FBR) missed its collection targets by over Rs190 billion during the first four months of the fiscal year, including a Rs100 billion shortfall in October alone. If this trend continues, they warned, the government may resort to a mini-budget, further burdening businesses and the public.

The LCCI president attributed the crisis to political distractions diverting focus from economic reforms. He urged policymakers to address structural issues within the tax system and broaden the tax base, highlighting untapped resources such as over 100 million bank accounts. He suggested adopting technology-driven solutions to integrate these into the formal economy.

The LCCI leadership criticised temporary measures like higher federal excise duties on sugary drinks and increased withholding taxes, labelling them as superficial fixes that burden consumers and businesses without addressing underlying problems. They also cautioned against excessive taxation on imports and raw materials, warning that it stifles industrial growth and reduces competitiveness, ultimately worsening the revenue gap. The LCCI called for a comprehensive strategy, including public-private partnerships, targeted incentives, and digitalisation to enhance tax efficiency. "Delays in action will compound the problem. The time to act is now," Shad concluded.