OICCI recommends broadening of tax base

Foreign investors suggest mandatory documentation of all economic activity.


Our Correspondent March 15, 2012

KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has reiterated the need to document all sectors of the economy in its taxation proposals for the upcoming budget. The OICCI’s Taxation Proposals 2012-13 have been formulated to provide guidelines in broadening the tax base and eradicating tax evasion in the country.

“OICCI’s budget proposals are aimed at broadening the tax base, providing incentive to the honest tax payers and, above all, enhancing documentation of the economy,” said Humayun Bashir, president OICCI.

The OICCI has recommended that all legal entities – including individuals, association of persons, corporations and non-governmental and not-for-profit organisations – file annual tax returns and wealth statements, irrespective of source of income, if total annual income is in excess of the government approved threshold of Rs350,000. If the earned income falls under the exempt category, then exemption may be claimed separately.

The OICCI has further recommended that, subject to legal provisions, the Federal Board of Revenue (FBR) should obtain details of all customers of financial institutions whose investments exceed a certain threshold during the year. It has been suggested that the FBR use Nadra and other databases available to identify potential taxpayers. The FBR should also regularly interact with tax and administrative experts to determine additional measures required for enlarging the tax net, the report says.

Bashir said that the OICCI is an important stakeholder in Pakistan’s economy, with membership of 189 foreign investors belonging to leading multinationals from 33 countries. He hoped, therefore, that due consideration will be given to OICCI taxation proposals; which he says are progressive and aim distributing the burden of taxation proportionately on all segments of the society.

Published in The Express Tribune, March 15th, 2012.

 

COMMENTS (2)

Yusuf | 12 years ago | Reply

Nearly Eighty Percent of massive foreign direct investment came from Chinese Living Overseas during the early years of Chinese Transformation under Deng Xiaoping. The Results have been dramatic. China started from lower point than any South Asian countries and also had language barrier to overcome too. China had tremendous advantage in its Diaspora's willingness to engage as well as invest in China. The Overseas Chinese who invested were entreprenuers with techonogies to help build China as a modern progressive nation. We did not see such dramatic pourning of Overseas Pakistani Entreprenuers pouring of Industrial investments with new techonologies in the early eighties or even to this date. Overseas Pakistani get Return in form of Social Security as well as Pension in Old Age in their respective countries. The Tax Paying Citizen of Pakistan do not get any Return in Old Age or Pension as such even after filing yearly Tax Returns. When you pay to Government as in Income Tax or Wealth Tax the Citizen of Pakistan expect to be taken care of reaching age Sixty. But that is not the case in Pakistan for common citizen. Beneficiary to Pensions are Government Employee, the Armed Forces, Registered Industrial Labors and Public Enterprise. Unless this is corrected in the coming Budget the Ctitizen will stand Equal and a Stakeholder. Please Be Fair in your Proposal to the Government of Pakistan. The common ctizen of Pakistan should stand as equal and you will see Millions of Pakistanis filing yearly Tax Returns.

Hafiz Shah Ali | 12 years ago | Reply

OICC recommendations are correct. All income should be taxed. FBR should spend 95% of it's manpower and resources on broadening the tax base and enforcing the tax law

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ