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April 17, 2020

FPCCI budget proposals seek reduction in tax rates

Business

April 17, 2020

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has finalised its proposals for the federal budget, and recommended to reduce the tax rates to help increase competitive edge of indigenous products in both local and global markets.

FPCCI’s proposals envisage revamping taxation system, documentation of economy, employment generation through industrialisation, promoting a responsive and equitable taxation system and trickledown effect of the fiscal space to the grass root level, which would be forwarded to the concerned quarters in a fortnight, a statement said.

FPCCI President Mian Anjum Nisar said the FPCCI, with a consistent commitment to developing and promoting a modern, responsive and equitable taxation system, had formulated the proposals.

He said the proposals incorporated feedback received on matters related to revenue and taxation throughout the year from members, trade bodies, stakeholders, tax practitioners, knowledgeable people etc. The FPCCI had invited proposals, organised workshops, and held a series of Budget Advisory Council meetings, “wherein these proposals were discussed in detail and some contradictory proposals were re-examined and final proposals were redesigned in line with the best interest of the country”.

Moreover, the FPCCI would also submit its proposals to meet the challenges being faced by trade and industry due to the outbreak of COVID-19, as its severe and adverse impacts on various aspects of Pakistan’s economy were quite discernable.

These impacts might lead to negative growth rate, deterioration in current and fiscal balance, disruption in supply chain, and increased unemployment etc.

“Macroeconomic proposals contain long-term action plan to boost exports, promotion of branding, enhancing SMEs sector, creating employment opportunities through industrialisation and independent tax judicial system,” Nisar added.

Zakaria Usman, convener of the Budget Advisory Council, said FPCCI proposed to the Federal Board of Revenue (FBR) to reduce the tax rates to help increase competitive edge of indigenous products in both local and global markets.

“High tax rates provide incentives for tax evasion and corruption and results in high cost of doing business.”

At present the total numbers of NTN holders in Pakistan was over four million, however, the FBR has miserably failed to obtain return of income from these NTN holders and increase the number of active taxpayer during the last decade. FBR could not fetch much tax filers, despite prescribing higher withholding tax rates for non-filers.

“FBR should conduct a study to find out what has gone wrong that even after penalising the non-filers, they are happy to pay more by way of advance tax instead of filing returns,” he urged.

Usman said measures should be taken to facilitate those, who were taxpayers and contributed in the national tax pool in all manners, so they became goodwill ambassadors for the FBR.