Panel proposes trade hours extension

Says stronger economic activity to boost tax revenues

ISLAMABAD:

A parliamentary panel on Tuesday recommended an initial 30-minute extension to existing business and market hours in a bid to increase income and sales tax revenues.

The subcommittee of the Senate Standing Committee on Finance and Revenue stressed the need for a business-friendly environment to promote economic activity and investment.

However, the Power Division opposed the proposal, warning that the move in the current energy crisis could require the operation of furnace-oil plants. The committee was further told that the country had only one day's stock of LNG and that importing spot cargoes would make electricity more expensive.

An additional 600 megawatts of electricity would be required if business hours were extended, the Power Division said, adding that running furnace-oil plants would increase the fuel cost per unit by Rs5.

The subcommittee stressed the need to strengthen the Federal Board of Revenue (FBR) engagement with the business community and provide maximum facilitation and ease of doing business.

The convener said a business-friendly environment was essential for promoting economic activity and increasing tax revenues.

The FBR told the subcommittee that several confidence-building measures had been introduced, including joint committees comprising representatives of the business community and the tax authority.

The committee was further informed that, on the prime minister's instructions, FBR chairman would establish a camp office in Karachi during the first week of every month. A two-day camp office in Lahore was also being planned so that businesspeople could have their issues addressed in their respective cities instead of travelling to Islamabad.

The convener welcomed the initiative and directed that similar facilitation measures should also be extended to FBR chief commissioners to ensure their effective implementation.

Difficulties faced by exporters and businesspeople in banking transactions also came under discussion as the panel stressed the need for practical alternatives. It suggested that, where permissible, insurance guarantees should be considered as an alternative to bank guarantees or cheques.

The FBR assured the committee that it would examine the matter and seek a solution.

The convener also recommended introducing facial-recognition technology to facilitate taxpayers whose fingerprints had faded or could not be verified. The FBR and National Database and Registration Authority (NADRA) were directed to coordinate on an urgent basis to resolve the issue.

The committee also sought a list of FBR officials holding dual citizenship or permanent foreign residency.

The Ministry of Industries and Production briefed the subcommittee on matters relating to EPZs and SEZs, informing it that, under a condition of the IMF's Extended Fund Facility (EFF), the zones would be phased out by 2035.

The ministry said the measure was taken to eliminate economic distortions and bring all sectors onto an equal footing under the tax system.

The convener recommended that EPZs and SEZs should not be adversely affected and that Pakistan should renegotiate the matter with the IMF while keeping the country's industrial and investment interests in view.