Federation of Pakistan Chambers of Commerce & Industry (FPCCI), the apex body of traders and businessmen, while endorsing the rejection of Reformed General Sales Tax (RGST) by 40 umbrellas Chambers of Commerce and 80 representative associations of the country, termed the RGST as death warrant for the economy of the country.
Addressing a press conference here at Federation House on Monday, President FPCCI, Sultan Ahmed Chawla said the manner in which RGST was presented in the parliament was totally unacceptable. He said last year it was decided to get additional revenue by taxing real estate and agriculture income but no action was taken in this regard. He said these potential sectors could not be left outside the tax net and should be taxed. The government is collecting tax from one sector instead of bring all sectors under the tax net, he added.
Chawla said the country suffering a loss of Rs 500 billion annually due to smuggling and illegal invoicing. He termed the Public Sector Enterprises running into losses such as PIA, Railway, Pakistan Steel Mills, Wapda and others as white elephants for the country.
Chawla said that electricity tariff has been doubled during last 28 months. He said that the major problem of the country is not shortage of resources but the usage of resources in a non-productive manner. "Government is lacking proper management and good governance," he opined, adding that the government did not consult stakeholders regarding RGST during last five months.
The decision to impose RGST was taken in haste just changing the nomenclature from VAT to RGST because IMF threatened to stop the tranche of $4.8 billion in December, Chawla said. Lashing out at International Monetary Fund, he asked the government to get the country rid of the global lenders. He urged that people who are already paying taxes should not be squeezed further instead of broadening the tax net.
President FPCCI suggested that the agriculturists earning profit annually over three hundred thousands per year should be brought into tax net. While supporting the privatisation of 'white elephants' (PIA, Railway, Wapda, Pakistan Steel Mills and other corporations) FPCCI president said it was not the responsibility of the government to run industry, they should be privatised and private sector must operate these corporations.
Chawal said that the electricity tariff was started to be increased with the pretext of pressure from IMF, adding that at that time electricity shortage was 1,000 MW, but today it had touched 4,000 MW. He called for resolving the long-standing issue of circular debts to enable Independent Power Producers (IPPs) to generate electricity at their full capacity.
The FPPCI President criticised the government decision of increasing power tariff by two percent after every month, saying that the decision would compel the businessmen and industrialists to windup their units. Criticising IMF, Sultan Chawla said the global lender wanted to continuously squeeze the country and did not have concern about its development.
He lashed out the Fund for its 'double standard' saying that Pakistan is being pressured to abolish subsidies by IMF, while in the West the situation is completely different. "US provides 60 percent support and subsidy to farmers and industries, China provides 68 percent, India gives 38 percent and other countries like England provides over 50 percent," he added He said the present high electricity tariff was making the country products uncompetitive in international market.
He asked why Trading Corporation of Pakistan was not allowed to import sugar on time, adding that when the price of the commodity reach to Rs 130/kg sugar was offloaded in the marker. President Pakistan-India CCI & former FPCCI president S. M. Muneer on the occasion rejected imposition of RGST.
He said the electricity was being stolen and instead of stopping the Kunda system, power tariff was being increased. S. M. Muneer claimed the livestock was being smuggled to Iran. He said the five sectors, which were enjoying zero-rated tax, were also being brought under the tax net. Muneer said the mark up rate has been increased significantly to 16 percent due to inflation in Pakistan while in Bangladesh it is 10 percent, and it's eight percent in India.
He said now the government was imposing 15 percent tax on pens, pencils, milk for children and even on text books under the RGST regime. He hoped that Finance Minister Abdul Hafeez Shaikh would spare time for visiting Federation House for listening to the businessmen and industrialists.
Vice President CACCI and former president SAARC-CCI & FPCCI Tariq Saeed while speaking on the occasion said all the trade organisations, associations and chambers had rejected RGST. He said businessmen were facing problems in understanding the 61-page draft of RGST, adding that as the draft the wholesalers and retailers must be registered, but it is the responsibility of government to register them instead of the Federation.
The federation can only provide NTN numbers of big shopkeepers to the government. He urged the Finance Minister to come to Federation House and listen to businessmen about their problems. He hoped that If Finance Minister visited the federation they would jointly bring out any solution to the issue. He hoped the Parliament would not approve the RGST bill.
Tariq urged the government and FBR high ups to have dialogue with businessmen regarding RGST, which has already been rejected across the country, besides the coalition partners of the government. He criticised Musharraf regime saying it destroyed the country.
To a question he said the performance of any government is assessed after its departure. He deplored that General Musharraf allowed US drones to hit target insides Pakistan, saying that our schools are being destroyed in a planned manner. He opined that US was facing defeat in Afghanistan and would flee soon.
Tariq Saeed demanded of the government to seek political solutions for the ongoing war on terror, stops Nato supplies and quit this war. Vice President FPCCI Zakria Usman also spoke on the occasion. FPCCI Vice Presidents, Muhammad Mansha Churra, Zakaria Usman, Mumtaz Ali Sheikh, Secretary FPCCI, Masood Alam Rizvi and other office-bearers were also present on the occasion.
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