President of Karachi Chamber of Commerce and Industry (KCCI), Shamim Ahmed Firpo has urged the Prime Minister Mian Muhammad Nawaz Sharif to withdraw all discretionary powers given to the Federal Board of Review (FBR) which have proven to be counterproductive.
In a letter to the Prime Minister, on behalf of the KCCI, Firpo urged him to withdraw all the discretionary powers given to the FBR in the last four budgets which, the letter said, proved to be counterproductive and a tool to harass the business and industrialist community alongside increasing corruption manifolds. The letter further said that Karachi Chamber being the largest chamber of the country and representing the business and industrialist community of Karachi whose participation in the economy/revenue of Pakistan is exceptional and undeniable, had been submitting budget proposals in the past.
"However, this was not the case anymore as our Budget Proposals submitted during the last four budgets have been totally ignored and we were never taken on board prior to finalising these budget documents. On the contrary, massive discretionary powers were entrusted to corrupt FBR officials who used these powers to further twist arms and squeeze the existing registered taxpayers and that is the basic reason why the overall tax-base remains limited between 800,000 to 900,000 income taxpayers, and also the number of registered Sales Tax payers remains similar," complained the letter.
For that reason KCCI, under protest, decided not to submit budget proposals now.
The KCCI letter praised finance minister Ishaq Dar saying he is doing a great job but somehow FBR Officials have been successful in acquiring these discretionary powers through the Finance Bill and even blocking the recommendations of Tariff Reform Commission (TRC) on the subject matter.
The KCCI letter requested the Prime Minister to consider the hardships being faced by the business and industrialist community due to widespread corruption and arm-twisting tactics by the FBR which has to be tackled. Shamim Firpo proposed that the problem could be sorted out by completely withdrawing the discretionary powers and that would strengthen business and industrialist environment for the progress and prosperity of Pakistan. He said that the KCCI's proposal the only way forward to enhance the revenue collection by attracting new taxpayers into the net. KCCI president pointed out following discretionary powers of the FBR: SALES TAX ACT 1990: (1) Section 37, Sub Section (3); (2) Section 37A; (3) Section 37B; (4) Section 51; (5) Section3 (Sub Section-7); & (6) Section-3 (Sales Tax Scheme Chapter-II of Sales Tax Special procedure 2007).
INCOME TAX: (1) Powers to Enter and Search U/S 175(1) & (2); & (2) Powers to Obtain Information under Section 176 of the Income Tax Ordinance 2001 The letter said that federal excise duty (FED) under Federal Excise Act 2005, causes dual and exorbitant taxations and also proved to be very detrimental for numerous businesses so such FED should be immediately phased out or drastically reduced after consultation with concerned stakeholders.
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