KARACHI: To Increase the “tax net”, Federal Board of Revenue (FBR) should reduce “tax rates” like in Russia that by reducing tax rates managed to double their tax net, said Ateeq Ur Rehman, economic & financial analyst.
He said the FBR has targeted this year approx Rs6150 billion and is contemplating to fetch approx Rs7804 billion next year. This is not impossible because a genuine businessman and a respectable “taxpayer” understands and continuously cooperates with it, although whatever the business conditions maybe.
Giving more taxpayers notices is not the solution. The collection by FBR notices is hardly restricted to 3 percent of overall tax collection. As much as 97% taxes come through “import and withholding tax“. It is requested that the existing taxpayer should not be pressurized and stressed by FBR notices time to time, he suggested.
He said that the government has already withdrawn exemptions and imposed 17% Sales Tax on the import of different essential items like plant & machinery, raw material, solar panel and its allied products, dairy products, food supplements and cotton/ sunflower/ canola seeds to the tune of Rs.343 billion from January 16th 2022. This has direct effect on end user, escalating cost of production, decreasing the business revenue and thus increasing the inflation.
He said that after Finance Supplementary Bill 2021, the government may prepare another Finance Supplementary Bill 2022 to withdraw exemptions and impose 17% sales tax on fertilizers, pesticides and tractors. This will create revenue reductions at local agriculture produces. FBR should consider such aspects, also.
Copyright Business Recorder, 2022
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