Govt’s planned tax amnesty scheme to benefit growth: governor

KARACHI: The planned tax amnesty scheme for all sectors of the economy would encourage documentation and ensure growth in tax revenue, provincial governor said on Monday.

Governor Sindh Muhammad Zubair said it is a wrong impression that the tax amnesty has only been announced for the capital market. “A tax amnesty scheme is under consideration, which will be growth oriented and for all sectors,” Zubair said at the Karachi Chamber of Commerce and Industry (KCCI). “A committee is considering all the aspects before finalising the incentive scheme. The scheme will (benefit) manufacturing and industrial (sectors) as well as the capital market.”

Governor said past amnesty schemes failed to bring desired results, but "this time the government decided to widely market the incentive package." The PML-N government has launched four amnesty schemes during its current tenure and experts said the planned scheme would face the same fate as the earlier schemes.

On the businessmen criticism to the Federal Board of Revenue (FBR), the governor said the revenue body should be praised for its contribution in tax collection, which was almost doubled during the past four years.

“The FBR has increased the revenue collection from Rs1,900 billion to a likely Rs3,600 billion plus this year,” he said. “... which doubled the share of province in NFC (national finance commission) award during the past four years.”

Zubair said the increased share in revenue would help the provinces to raise budgetary allocations for health and education projects. He said the security situation in Karachi has improved. The federal government wants to make Karachi as destination of investment. The city saw spectacular growth in the past, but the law and order challenges marred its progress. 

“The economic growth of Pakistan depends on growth in Karachi,” he added. The governor said no doubt Karachi contributes the most revenue collected from across the country, because 90 percent of multinational companies are based in Karachi and they pay taxes from their headquarters.

Shamim Ahmed Firpo, president of KCCI, said the chamber has been submitting budget proposals to the government for the past four years, but not a single proposal was incorporated in the budget.  “Instead, the government empowered the tax authorities with the discretionary powers,” Firpo said.

The KCCI president said exports are falling due to increase in cost of doing business. “There are several issues hampering the manufacturing activities… water is the major issue.”  Siraj Kassam Teli, chairman of Businessmen Group and former KCCI president said the government should implement the recommendations forwarded by the Tax Reforms Commission (TRC).  The government constituted TRC, in consultation with business community and other stakeholders, around one and half year back.