The finance minister said the government needed to increase revenue collection by 25% to meet this year’s target. PHOTO: AFP
He gave the assurance while talking to a business delegation, led by LCCI President Farooq Iftikhar and comprising former presidents and senior members of the chamber.
The delegation also held a meeting with Federal Board of Revenue (FBR) Chairman Tariq Bajwa, highlighted the challenges faced by the business community and called for urgent measures for addressing the problems.
The finance minister said the government needed to increase revenue collection by 25% to meet this year’s target and he and his team were prepared to sit with the business community to discuss issues keeping in view the convenience of trade and industry.
Welcoming the relief given to some sectors of the economy, the LCCI president said continuous zero-rating for bicycles, cut in duty on old clothes, a separate mechanism for capacity tax on the beverage industry and the order on printing of retail prices by the manufacturers of items specified in the Third Schedule would go a long way in the revival of economic activities in the country.
Other issues that came under discussion included sales tax record, powers of commissioners inland revenue, access to bank accounts, posting of FBR staff at business premises, rate of withholding tax on local sales and services provided to five export-oriented sectors, tax under Section 236-D and 236-H, addition of items to the Third Schedule of Sales Tax Act, setting up of appellate tribunals, inadmissibility of input tax and delay in refunds.
They also assessed the implications of smuggling, mis-declaring the value of goods at ports, selection of cases for audit and unnecessary import of luxury items.
LCCI President Farooq Iftikhar told the finance minister that revenue collection would receive a considerable boost if smuggling and unnecessary import of luxury items were checked. The private sector was ready to play its role in this connection, he said.
Iftikhar pointed out that markets were flooded with smuggled items, causing a loss of billions of rupees to the national exchequer, which could be averted by using latest techniques like tracking the movement of containers at the entry and exit points on the highways.
He proposed that customs duty on smuggling-prone items should be reduced to discourage the practice and support legal imports.
According to businessmen, massive smuggling of plastic raw material from Iran is going unchecked as a result of which imports are shrinking and taxpaying traders are finding it difficult to import the raw material because smuggled goods are available at a lower price.
The duty on plastics (covered by Chapter 39) was proposed to be reduced to 5%. Apart from this, withholding tax may also be slashed.
Iftikhar said imports against TT were increasing because of massive misuse of the facility and suggested that these imports should be discouraged and an appropriate legal framework should be introduced. Furthermore, import of unnecessary and luxury items such as vehicles should be discouraged instead of introducing amnesty schemes for legalising smuggled goods.
Citing the example of imports from China, he said it clearly showed that around $2 billion worth of goods were declared at a value less than the price in the country of origin, dealing a blow of Rs70 billion in terms of lost customs duty and taxes if calculated at the rate of 35%.
Businessmen also strongly oppose amendments relating to selection for audit, saying it will increase corruption, discrimination and misuse of discretionary powers.
Published in The Express Tribune, July 16th, 2013.
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