‘Taxation system needs reforms’

LAHORE: Taxation system needs reforms based on ground realities and due consultation process with the stakeholders to ensure result-oriented policies for the businessmen, an official said on Wednesday.

Harmonisation in tax system across the country is also a must to get rid of the issue of dual taxation, said Malik Tahir Javaid, president of the Lahore Chamber of Commerce and Industry.

He termed the newly-announced amnesty scheme a good step to bring back capital to the country, and said these cannot be productive until and unless major issues such as withholding tax on banking transactions exist.

Pakistan’s international ranking of paying taxes, at present, is 172 of the 190 countries around the world, he said, adding that neither the existing system is economically neutral, taxpayer-friendly, equitable, progressive nor facilitative and supportive to generate healthy business activities for all.

Of course, taxation is an important source of revenue collection, but tax policies must be based on the best international practices and universally accepted canons of taxation.

The LCCI president said various distortions in the existing tax policies can be removed if the feedback of all the representatives of business organisations is given due consideration by the Federal Board of Revenue (FBR).

LCCI Senior Vice President Khawaja Khawar Rashid demanded reduction in the number and frequency of taxes.

Taxes may be paid quarterly instead of every month. For that matter, all para-tariffs must be merged in the main tariffs, he said.

Similarly, there should be electronic communication between the taxpayers and tax departments. These proposals can make noticeable difference and win the confidence of taxpayers, Rashid added.