Bring political will, rather than tax amnesty, says OICCI

Such schemes encourage high earners to stay out of tax net


Our Correspondent October 05, 2012

KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) has written a letter to the Federal Board of Revenue (FBR) chairman, conveying strong reservations about ‘yet another amnesty scheme’ being contemplated by the government.

In the letter, the OICCI expressed dismay and pain over the shrinking small and honest taxpayer base, which represented key stakeholders in the economy including member companies of OICCI.

OICCI claimed that 88 of its 189 member companies alone contributed over 20% tax collection in the country. “Mobilisation of tax revenue needs political will and sound governance, rather than successive amnesty schemes,” it stressed.

OICCI pointed to concerns of its members, which it said should be seen in the perspective of the current harsh taxation measures applicable to honest taxpayers.

These include minimum tax on turnover where some companies are required to pay tax even on losses or pay over 70% tax on profit before tax, significant cost and effort put in by companies to act as tax collection agents for the FBR without which a lot more would potentially be lost into the undocumented economy and lack of relief for honest taxpayers while tax evaders are considered for amnesty.

Commenting on the issue, JS Global Capital analyst Atif Zafar said concerns of OICCI were not baseless. “When the government allows tax evaders to pay a minute amount to forget their past record, it hurts the genuine taxpayers,” he said.

However, Zafar did agree with the government, saying it was not completely wrong. “The government needs to increase the tax-to-GDP ratio for which it may be considering all such measures to bring tax dodgers in the tax net.”

Published in The Express Tribune, October 5th, 2012.

COMMENTS

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