Traders seek widening of tax base via legislation

Demand inclusion of agri-income in tax net, elimination of amnesty schemes

LAHORE:

As the tax shortfall may further widen to around Rs400 billion by the end of December, the All Pakistan Business Forum (APBF) has recommended the broadening of tax base through appropriate legislation to ensure that all income earners pay taxes equitably, including the agriculture sector.

In a statement, Forum President Syed Maaz Mahmood observed that against the target of Rs4.64 trillion, the FBR collected Rs4.29 trillion in five months (Jul-Nov 2024), achieving a growth of 23%. It needs a 40% growth to reach the annual goal of nearly Rs13 trillion.

He said that the IMF would assess December's tax collection before deciding on bringing a new tax-loaded budget. In this regard, the IMF's condition to include agricultural income in the tax net could pave the way for enhancing the tax revenue. "Otherwise, the whole burden will again be shifted to the industry."

Mahmood pointed out that there was a long way to go before the agricultural income tax bill could become a law and the revenue started flowing in.

Undoubtedly, he added, there was a significant progress, both on fiscal and current accounts, which recorded a surplus.

The APBF chief recommended that the culture of amnesty schemes should be done away with as it discouraged the honest taxpayers.

He called for slapping penalties to punish the tax evaders, adding "appropriate laws should be formulated to enable the government to seize local assets, in equivalent value, or levy appropriate taxes, if any person holds any kind of assets outside of the country for which source of income could not be established."

On the other hand, Mahmood stressed, the export-oriented industries should be facilitated. For these sectors, rules, regulations and procedures should be streamlined so they could play their due role in economic stability.

"It is a matter of concern that exports are showing a low growth, despite the country having all the resources, which is not a good omen," he remarked.

"We have to focus on investing in the energy sector, lowering tariffs on smuggling-prone items, increasing the share of direct taxes in revenue collection and reducing the slabs of indirect taxes to achieve the key economic targets." To fill the gap between demand and supply of energy, he advocated the allocation of maximum funds for the construction of dams and water reservoirs and further tapping the Thar coal deposits.