FPCCI, Ishaq Dar agree in principle to remove tax anomalies

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Thursday said the finance minister would address the anomalies pointed out by the business community on taxes and duties in the finance bill.

FPCCI President Irfan Iqbal Sheikh said that Finance Minister Ishaq Dar “has agreed in principle to remove some of the major anomalies in the finance bill to accommodate the grievances, issues and apprehensions of the business, industry and trade community”.

In a high-profile meeting with the FPCCI, Dar promised that he would look into the anomalies presented to him by the FPCCI on income tax, withholding tax, sales tax, federal excise duty, and customs, Sheikh said.

The meeting with Dar was also attended by PM’s Finance Assistant Tariq Bajwa, Reforms and Resource Mobilisation Commission Chairman Ashfaq Tola, and the top leadership of the Federal Board of Revenue.

Sheikh said one of the most important demands accepted by the finance minister was that the proposed measures would be incorporated to broaden the tax base, instead of further squeezing the existing taxpayers. “It was agreed that parity will be applied on industrial and commercial importers of the raw materials in their income tax through the means of WHT for a level-playing field. Similar economic activities like logistics, goods carriers and oil transporters will be treated at par as well,” he added.

Section 99-D of the ITO also came under discussion and it was agreed that it was inequitable to tax only the gains, profits and dividends – and, not accounting for the losses and other adverse economic factors. Therefore, levying of the additional tax will be reconsidered. Additionally, the government would also reconsider the re-imposition of 10 percent tax on bonus shares.

Sheikh also categorically opposed super tax under Section 4-C of ITO as counterproductive for business, commercial and industrial activities of the country, and said “we cannot punish the business community for generating revenues, employment and making justified profits in the process”.

Sheikh has also asked the government to remove the proposed turnover tax on special economic zones.

FPCCI Vice President MA Jabbar proposed that a level-playing field should be given to the local manufacturers to enable import substitution.

He also reiterated FPCCI’s demand that just and fair protective and retaliatory mechanism should be allowed to the business community vis-à-vis excesses and harassment of the taxation authorities.

He also demanded the government to provide tax-parity for the imports and local manufacturing of solar power systems.

The condition of CNIC at the time of sale of goods would encourage flying invoices, he added.

The business community demanded that the data and privacy of taxpayers should be protected at all costs; rights of the taxpayers should be adhered to in accordance with the constitution, and Section 33 of FTO should be employed for alternative dispute resolution for all purposes.