ISLAMABAD: The Pakistan Chamber of Commerce and Industry (FPCCI), Friday, submitted a set of proposals to the Federal Board of Revenue (FBR) for bringing unregistered businessmen into the tax net including fixed tax scheme for retailers, abolition of further sales tax, suspension of the CNIC condition till expansion of tax base, and discontinuation of power/gas connections of unregistered commercial and industrial units.
A delegation of FPCCI led by its President Nassar Hyatt Magoo met with FBR Chairman Asim Ahmad, here on Friday at the FBR Headquarter.
The delegation put forth its proposals to the chairman FBR for inclusion in the forthcoming budget.
The delegation raised the issue of closure and non-clearance of vehicles at Chaman Border due to rent dispute between different government institutions.
They also apprised the chairman about the difficulties faced by importers and exporters at Kharlachi Border, Kurram agency.
Regarding value-added sales tax of three percent at imports, the FPCCI requested to withdraw the same on import of industrial raw materials, so as to provide the level-playing field to importers and industry.
The FPCCI also requested to withdraw further tax and to reduce minimum tax under section 113 of the Income Tax Ordinance for different sectors.
The delegation raised the issue of higher tax on import of tea as well.
The chairman FBR was assisted by Member (IR-Policy) and his team.
The chairman FBR assured the redressal of issues raised by the representatives of the FPCCI and assured consideration of proposals in the forthcoming budget.
At the conclusion of the meeting at the FBR House, FPCCI President Magoo told Business Recorder that the three percent further sales tax on supplies to unregistered persons is not expanding the tax net.
People are using fake CNICs/invoices.
The FBR remained unable to identify the unregistered persons on the basis of three percent further sales tax.
The solution to expand the sales tax net is to reduce or abolish the further sales tax from three to one percent.
On the basis of size of shops/retail outlets, a fixed scheme be introduced in the coming budget.
At the same time, the FBR can continue with the scheme of point of sales (POS) to integrate big retailers with the FBR online system, he stated.
Magoo stated that there is a need to broaden the tax base.
All field formations of the FBR must work towards bringing new taxpayers in the net.
All entities using industrial and commercial connection of electricity should be compulsory registered.
The FPCCI proposed that a new law is required in the budget to cut the electricity or gas connections of consumers, who remained un-registered with the FBR.
The FBR may obtain information related to land, properties, vehicles, etc registered with the provincial governments including through the NADRA data bank FBR for linkage with the existing and new tax payers, the president FPCCI added.
The FPCCI has strongly recommended the FBR to completely revamp the current adjudication system in budget (2021-22), as prosecution and adjudication is being conducted by the same tax functionary.
Sources told Business Recorder that a meeting was held between the FPCCI and tax authorities of the FBR at the FBR House to discuss budget proposals.
The FBR side was headed by the chairman FBR and his team of budget makers.
According to the FPCCI presentation on budget, the existing system of adjudication should be completely revamped as it negates the constitution of Pakistan, wherein, the prosecution and adjudication is being conducted by the same tax functionary.
The ADRC will help to contain litigation.
The ADRC committee to consist of three members, one from the FBR, the second from business community on recommendation of the FPCCI, and the third nominee with judicial background.
The FPCCI strongly recommend activating the Tax Policy Unit, which has been notified under the Ministry of Finance.
The FBR has been suggested to announce that taxpayers who will file their tax returns with 10 percent or more tax as compared to the last year, then their returns will be accepted by the FBR with no questions to be asked and no notices to be issued nor any audit to be done.
The entire tax collection machinery should focus on generating new taxpayers.
Targets to be given to the FBR and its field staff in terms of generating new taxpayers and taxes from them.
It may be noted that the total collection by the tax machinery in terms of actions taken for tax returns were only Rs47 billion or less than three percent of the total tax collection under the head of direct taxation.
If this team focuses on generating new taxpayers the revenue collection will be much higher.
A 360-degree overview should be taken by the FBR and establish linkage through property registration, utilities bills, motor vehicles registration, to be clubbed with the concerned taxpayer’s profile.
This will help to generate new taxpayers as well.
Provision in the law is to be created, if required, for using the data for profiling taxpayers.
The current complicated tax procedures need to be simplified with lower tax rates.
Tax simplification may be completed on fast track.
The FPCCI is offering to work with all the government bodies and other stakeholders so as to ensure implementation to take effect from the new budget, the FPCCI suggested.
It is important that discretionary powers of the revenue collectors of different levels should be streamlined.
Copyright Business Recorder, 2021
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