LAHORE: "The Federal Board of Revenue (FBR) has realigned its strategy and is now focusing on growth of businesses and industry with tax revenues as a by-product. The growth of economy is now the main target of FBR rather than tax revenues."
Member Inland Revenue-Operations of the FBR Dr Muhammad Ashfaq Ahmed stated this at a meeting held here at the Lahore Chamber of Commerce and Industry on Saturday. Chief Commissioner Ahmad Shuja and other senior FBR officers were also present in the meeting.
Ashfaq Ahmed said the refunds of unprecedented amounts are being paid as FBR now believes in pumping liquidity into businesses, adding, previously when the FBR was holding refunds, the private sector was going to banks for working capital and this increased their cost of business.
He said through the new refunds system, the refunds are being paid within 72 hours. The whole system is transparent and fully automated. Businesses have to improve technologically to align with the new system of FBR. Income Tax refund has many complexities and requires multiple verifications. This system will be improved in coming months, he added.
He further said once the taxation system is running smoothly, the Sales Tax rate will come down. The issues of POS (point of sale) system are being resolved in consultation with the business community. The issue of misuse of tax incentives of FATA/PATA is a governance issue and measures are being taken by the government in this regard.
He said steps are being taken to bring the Customs valuation office to Lahore. A single portal is being made for federal and provincial taxes for harmonization of taxes, adding the refunds of Hafeez Centre affectees will be processed on top priority.
President LCCI Mian Tariq Misbah said the government should ensure successful implementation of the Automated Sales Tax e-Refund system in letter and spirit on a permanent basis to avoid any liquidity crisis. In addition to Sales Tax, the Income Tax Refunds should also be paid on urgent basis through the Faster Plus system, adding that the rate of 17 percent tax on the inputs of various export oriented industries is extremely high and should be brought down. Sales Tax should not be taken at the import stage.
It should be applied after the actual sale of the respective products as in many cases 10 percent to 20 percent products get wasted/ damaged/ discarded while loading & offloading or transporting from warehouse to sale points, he added.
Mian Tariq Misbah said all raw materials not manufactured locally must attract zero Customs duties. Government must eliminate Regulatory Duties and 2 percent Additional Customs Duty on raw materials to increase the competitiveness of local industry, adding that molded glass vials and wire-rods are not manufactured locally but Regulatory Duty is being charged on them that should be removed. Senior Vice President LCCI Nasir Hameed Khan and other office-bearers also spoke on the occasion.
Copyright Business Recorder, 2020
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