Sweeping powers to FBR: KCCI complain senate body of harmful effect on business

KARACHI: Clamour over "sweeping" powers to the FBR on Thursday rattled the KCCI meeting with the Senate standing committee on commerce, as tradesmen and manufacturers feared the move will bleed the industry and businesses.

President Karachi Chamber of Commerce and Industry, Iftikhar Ahmed Sheikh presented the committee with a series of problems from high taxation and SRO 350 to soaring costs of production during a meeting at the KCCI.

He warned the committee with its Chairperson, Senator Anusha Rahman Ahmad Khan, about the liquidity collapse the SRO 350 is set to cause to the Industry with tax office blocking huge refunds. He also made an outcry over a one percent turnover based fixed tax.

About the fraud clause in the tax law, he said it always makes the taxpaying businessmen suffer, demanding the committee to step up its role in scraping it for good. The law punishment lasts for 25 years, he added.

Investigation audit provision, he said, will open a floodgate of corruption in the tax office, adding that higher electricity and gas tariffs have triggered closures of manufacturing units and businesses. He lamented the costlier energy is even not supplied firmly to the industry.

Textile exporter Zubair Motiwala told the meeting that the entire chain of industry is "dejected", saying that "I have not seen such circumstances in the last 35 years". He was displeased with the government's move to introduce SROs, saying that they give immense powers to the FBR. He said that the investigation audit clause gives "sweeping" powers to the FBR, fearing that it will bleed the manufacturing sector.

Criticizing the government for having no solutions to stem the ever growing circular debt of IPPs, he said that the industry and businesses are likely to succumb to its burden. He asked the committee to stem the debt multiplication. Soaring costs of output from the higher taxation and energy tariffs are fast depriving the country's competitive edge on the global market, which is feared to ensue exports fall. He also clamoured over the cross subsidy, which the industry share as a financial burden to benefit domestic users and fertilizer sector.

Motiwala told the committee that the mass retrenchment has struck the industry across the country, leaving behind mass unemployment only because of the rising production costs. He warned the country is running to devastation if the government did not extend a helping hand.

Senator Talal Chaudhry acknowledged the concerns of the KCCI, saying that Karachi being the largest financial supporter to the national economy deserves more than what it demands to meet its needs. However, he made it clear that the ever troubling energy crisis has no quick fix as it requires a long-term plan and execution to provide the nation with an uninterrupted supply. Both, the poor and industrialist suffer alike from the energy scarcity. He said that the country has to increase its tax to GDP ratio as only way to move forward to prosperity, which stands at 9 percent at present. With such a low taxation base, he said that no country can grow.

Talal hoped the smooth privatization of the PIA will pave path for the private sector involvement in the country's economy, warning that any hurdles to bar the process will poise threats to the economic stability. He informed that the privation process is underway. He assured the KCCI about solving their problems, seeking its proposals to remove all stumbling blocks to the economic and industrial growth. He said that the government is planning reforms, which he saw, is the only solution.

Senator Anusha Rehman told the meeting that Prime Minister, Shahbaz Sharif "worried" about the poor state of economy, claiming that he has stepped up to correct the FBR. However, she disagreed that the country's all businesses and industries are grappled with the similar problems those of Karachi ones.

Senator Anusha urged the KCCI not to get panicked from the FBR powers since the PM has just "pinned" them as situation for the business community will become better soon. She claimed that the soaring inflation will not stay long to harm the taxpayers and businesses. The Senator however blamed the IMF "conditionalities" for the rising inflation from higher energy tariffs and taxation, saying that the interest rate is soon going to lower. "This (poor) state of economy is not perpetual," as the next year will see a betterment, she added.

Senator Bilal Ahmed Khan sought support from the industry amid the gloomy economic situation, saying that the businesses have to bear the burnt for some time. He feared the country may face a situation it saw in 1971 if economy completely collapsed and urged the KCCI for cooperation.

Senator Sarmad Ali also spoke, urging the KCCI to help the country pull out of the economic instability.

Copyright Business Recorder, 2024