Raise in GST may lead to corruption, under-invoicing: PTA

Pakistan Tanners Association (PTA), while expressing concern over the proposed increase in the general sales tax from 16 percent to 17 percent in the federal budget 2013-14 to improve revenue target, has said it could lead to corruption and under-invoicing.
PTA Central Chairman Agha Saiddain told Business Recorder on Thursday that higher percentage of tax always gave birth to malpractices such as under-invoicing and other corrupt practices. As a result, the government might lose both sales tax and customs duty on account of under-invoicing on imported items on one hand while the general public would face inflationary pressure, as prices of all commodities would shoot up, he added.
Secondly, the government has planned to bridge up trade deficit and improve balance of payments through foreign investments by auctioning 3G license and some other measures, whereas it would have been prudent to shift main focus on enhancing exports by introducing export friendly policies. The exports would automatically build the country's foreign exchange reserve by increasing in exports and applying import substitute measures, he maintained.
Agha Saiddain further said that business community was expecting business-friendly budget from Federal Finance Minister Ishaq Dar but his budget speech was traditional and routine like past. Keeping in fiscal deficit of 8.8 percent of current year with huge public debt of Rs 1,4284 billion the revenue target of Rs 2598 billion was insufficient as such the real budget was hidden under apparent budget announced by the government, he said.
He also said that previous government violated Debt Limitation Act 2005 and allowed Public Debt to grow by 88 percent in the last five years. Pakistan can easily manage higher tax collection by expanding tax base and by bringing more people in tax net including agricultural sector. "Why a person with large landholding is exempted from tax payment is beyond normal common sense. At first stage government may impose agricultural tax on landlords with huge landholdings and gradually bring it down to the reasonable level," he maintained. Agha, however, appreciated the decision of the government to set up Railway link between Kashghar and Gwadar and said Prime Minister Nawaz Sharif would be known as second Sher Shah Suri if he successfully implemented that project.