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March 5, 2015

Authorities urged to make tax forms simple


March 5, 2015

The tax authorities came under criticism at ‘Consultation on National Tax’ for complicating tax forms which forces businesspersons to engage lawyers or retired tax officials as consultants to complete tax formalities.
The consultation was arranged by Sustainable Development Policy Institute (SDPI) here on Tuesday.
Abdullah Yusuf, former chairman of the FBR, said that indirect taxation should be reformed so as not to be repressive for the poor. He said that we are having 60 per cent indirect and 40 pc direct tax ratio which needs to be reversed. He said that the bulk of poor man’s expenditure is on food items which have indirect taxation. He proposed uniform GST on all items. He said that preventive tax regime (withholding tax) is for generating income promptly. He called it adhocism.
He said our tax base is narrow. There are 87% taxes and are difficult to file. He said that retired tax officials are consultant and there is conflict of interest that prevents easy filing of taxes and there is heavy reliance on trade — related taxes like on oil. He said that there is no tax on agriculture which is discriminatory. He said the Federal Government should persuade provinces to implement agriculture and separate tax formulation and tax collection. He wondered how a collector can hear your appeal against himself. Tax adjudication system should be independent, he concluded.
Dr Akmal Hussain from FC College University, said that social protection is necessary for growth. Bismarck in Germany and Euro-socialism in Scandinavia used social protection for long-term growth, he said adding that low GDP cannot be a reason not to provide social protection. He called for equality in the country.
Masood Naqvi, chairperson, Tax Reform Commission, said that the commission was formed by Ministry of Finance. He said that various recommendations were given since 1948 but the problem is the process picking this or that recommendation and leaving others

aside and even those were not enforced. Enforce the laws and the revenue will double, he vowed. He said that FBR contribution in tax collection is minimum. He said that 64 tax payers have one tax collector in Pakistan.
Shaban Khalid, former chairperson of Islamabad Chamber of Commerce and Industry said that tax rebate is not given in time. He said that business should not be subjected to harassment. He said that even input invoices are not genuine. He said that tax amnesty scheme should not be there.
Former Commerce Minister Dr Hafeez Pasha who chaired the session said that banking system gives 80 per cent loans to one per cent businesspersons. He regretted that no one from FBR liked to turn up in the function despite requests. He said that there is a history of failure in tax collection. He said that our state has been made hostage by elite.
Just 6 per cent growth rate is a shame. He said that equality cannot come unless elites are ready for reform. He said that sales tax returns has no audit.
Dr Abid Suleri, executive director, SDPI, said that there is a need to have apolitical, free and evidence-based discussion on economic issues. Hence, he said, his institute started consultations three months before budget so that the recommendations could be presented in concrete form in time. For improving tax to GDP ratio we don’t require new policies but to have an assessment on why existing policies are not working and avoiding those mistakes in future.
Zakiya Hashmi, president, Islamabad Women Chamber of Commerce, said that tax policies should take into account women, poor, small farmers and entrepreneurs. She said that we cannot make progress without having Islamic banking system as there will not be “barkat.”
Dr Waqar Ahmad, Deputy Executive Director, SDPI, Dr Ashfaque Hassan from NUST also spoke on the occasion.

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