CBR chief hints at gradual end to presumptive tax regime

Chairman Central Board of Revenue (CBR), Abdullah Yousaf has hinted gradual end to the ''presumptive tax regime'' (PTR) during the upcoming fiscal year. He was talking to newsmen at a pre-budget seminar organised by the Institute of Cost & Management Accountants of Pakistan (ICMAP) here on Saturday.
Abdullah Yousaf said that PTR was not required and wherever in the world, documentation of economy was present there was no such regime. "As there was no documentation of economy existed in Pakistan therefore, this regime was introduced to mobilise taxation and as the things are improving there would be no need of PTR and it would be put to an end gradually," he said.
Earlier, addressing as the chief guest, he said that it was the policy of CBR to go through all the proposals and recommendations received by different sources. He, however, said that all recommendations and proposals were not entertained but mostly were considered and incorporated in the tax policy.
He urged the private sector to contribute in the economic growth and join the government in sustaining the growth trend. Addressing the seminar, President ICMAP, Sher Afghan Malik proposed to reduce corporate tax rate to below 35 percent, as had been done by most of the countries in South Asian region eager to encourage foreign investment.
He also proposed special allowances to newly developed companies and added that lower taxes should be applied for SMEs and new business set up, as this would encourage them to generate more work opportunities and it would be a great assistance to the country.
Referring to the ongoing reforms in CBR, he said that major objective of these reforms was to bring efficiency and transparency in the taxation system which could ultimately benefit all the stakeholders particularly the taxpayers. Ashraf Bawany, Director Finance BOC Pakistan said that long-term capital gains to be continued as zero-rated for another 10 years.
He further said that trading income should be taxed at the rate of 30 percent, while for incidence of tax on manufacturing and trading should be re-aligned and presumptive taxes on manufacturing should be immediately withdrawn.