‘18th Amendment continues to damage revenue generation’

Islamabad: The Pakistan Economy Watch (PEW) Chairman Brigadier (r) Muhammad Aslam Khan Sunday said the Eighteenth Amendment of the constitution has added to confusion in the taxation system.

“It has divided taxation system in an unnatural way hampering documentation of the economy, helping the undocumented economy and increasing the cost of doing business for the business community,” the PEW said. The amendment has resulted in a unique Value Added Tax (VAT) in Pakistan in which goods are taxed by federal authorities while services are taxed by the provincial authorities resulting in confusion, said PEW chairman.

He added that federal and provincial revenue authorities have their own conflicting definitions for goods and services which results in disputes, litigation and loss of revenue.

The PEW Chairman said that the VAT is collected by a single authority in all the countries except for Pakistan where the tax on services gathered by provinces some of whom are facing lack of relevant laws, human resources, paraphernalia, and ability. The capacity constraints resulted in low tax collection which has a negative impact on the overall collection, said Brigadier Aslam.

On the occasion, Dr. Murtaza Mughal said that the orchestrators of the 18th Amendment were not concerned about the welfare of the masses. They were concerned about politics otherwise corrective measures would have been taken after the realisation of the devastating consequences of the move on dozens of the sectors.

He noted that a country can never progress without a just and sound VAT, therefore, the incumbent government must take corrective measures.