Taxation: ICAP sets out proposals for upcoming budget

Tax base should be broadened, review board should be formed.

LAHORE:

There is a dire need for public institutions especially the Federal Board of Revenue (FBR) to hire a team of professional financial experts and chartered accountants for structural reforms.

These sentiments were expressed by the Institute of Chartered Accountants of Pakistan President Naeem Akhtar Sheikh while briefing media on taxation proposals to FBR by ICAP on the upcoming budget.

“This reform is especially needed in taxation as the revenue to GDP ratio is the lowest in the region,” said Sheikh.

He said that officers responsible for tax collection are civil servants who barely have undergone nine months’ training. “When a simple Bachelors of Commerce requires two years of study, how can the FBR officials successfully implement taxation reforms with such minimal training,” he questioned.

Sheikh said that though the current government’s efforts have resulted in a 15% increase in revenue collection but this is not enough and a lot still has to be done. He reiterated that it is imperative that the country’s tax base be broadened.

He explained that it is not sustainable for a country to collect more than three-quarters of its revenue from indirect taxes and thus, ways should be found to increase the direct taxes. He informed that ICAP has been giving various suggestions and recommendations to broaden the tax base for the last many years.

He further informed that the ICAP has suggested the government to form a Policy Board entrusted to review the fiscal policies in context of their impact on the economy. The prime objective of the board would be to debate and formulate a national tax policy in consultation with stakeholders. The board may comprise a broad spectrum of people from different fields such as eminent economists and other stakeholders like the tax bar Associations, trade bodies, ICAP and other professional bodies.

Published in The Express Tribune, May 13^th, 2014.

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