Tax bar association proposes policy board on revenue

KARACHI: The apex tax bar of the country has recommended the new government to establish policy board on tax revenue to make Federal Board of Revenue (FBR) an efficient and transparent organisation.

In a letter sent to Finance Minister Asad Umar on Thursday, Abdul Qadir Memon, president of the Pakistan Tax Bar Association (PTBA), urged the minister to set up “Policy Board on Tax Revenue” under his chairmanship and it should comprise economists, representative of professional bodies, State Bank of Pakistan, Securities and Exchange Commission of Pakistan, ministry of finance and FBR.

Memon said that the FBR and SECP should be depoliticised and allowed to work independently.

“Structural reforms should be brought in FBR in order to make it efficient, effective, modern, transparent, and business-friendly with an ability to bring change,” according to the letter.

In a set of proposals to the new government, the PTBA said, at present, the country is facing major problems on account of high current account deficit, budget deficit, low foreign exchange reserves, high average debt-to-GDP ratio, lowest tax-to-GDP ratio, broadening of tax base and low tax collection than the actual potential of the country.

It advised the government to increase revenue collection without jeopardising the interests of various segments of the economy and their long-term growth potential.

“Policy should not be just about producing a competitive tax environment, but also to create a fair tax system; one that takes account of the ability to pay, simplifies tax laws, encourages high rates of compliance, facilitates the existing taxpayers and operates with low administrative and compliance cost,” Memon added.

It is a fact that in the past couple of years, the existing taxpayers and major contributors of tax revenues have shouldered unprecedented financial burden.

“The existing taxpayers must feel that in “Naya Pakistan”, they will be given a fair and judicious deal on taxation,” it added.

The PTBA suggested the tax refunds should be paid within a reasonable timeframe, litigations should be minimised and they should be able to invest their time and energy for economic growth and better Pakistan, with job opportunities for talented youth who perforce have to migrate to greener pastures abroad.

The apex tax body pointed out that there is a lack of harmonisation of federal and provincial taxes and interprovincial taxes, which resulted in growing disputes and litigations.

“The government is required to put in place an adequate procedural formula to ensure that double or multiple taxations should not result from operating in different provinces under varying provincial and federal sales tax laws on services,” the PTBA said.

“The federal government should establish a National Tax Authority for harmonisation of tax laws, rules and regulations,” it suggested.