The Lahore Chamber of Commerce and Industry (LCCI) on Wednesday fully endorsed the findings of a commission on black economy. Commenting on report, LCCI President Sohail Lashari said the Commission had rightly identified the sources of black economy within the tax regime that were incurring a loss to the tune of more than Rs 100 to 125 billion per annum to the exchequer.
"We are all praise for the Commission that has pinpointed tax evasion of billions of rupees through under-invoicing, smuggling and other wrong tactics," he added. Lashari said it was on record that the LCCI for the last 15 years had been inviting the attention of concerned authorities towards under-invoicing, mis-declaration in HS code, weight and volume to the tune of billions of rupees by the importers of goods from China. But, it was very unfortunate that no concrete action had so far been taken to curb that menace, he added.
He said facts were also on record that there was a huge difference of dollar 3.5 billion between China's exports to Pakistan and Pakistan's imports from China. He said that this phenomenon could be overcome by imposing a complete ban on import through TT but the business community was unable to understand why the FBR/SBP, who always stressed business through banking channels, were silent on that particular subject for the last many years.
"There is also a need to convert the 'withholding tax regime' into a 'minimum tax regime' without any possibility of refunds. The withholding tax except on salary becomes part of the price and is passed on to the ultimate user or consumer of goods. Why a consumer should pay the income tax of a businessman. There is, therefore, no justification to allow refund of the same. All other exemptions should be withdrawn in the light of international/national studies, which have proven that exemptions of tax on income did not encourage the documentation of economy at all," he added.
The LCCI President said all genuine businessmen were ready to pay income tax on the income earned through profitable businesses/industrial undertakings; therefore, all persons should be asked to file income tax returns and declare their income separately from each source whether exempt or otherwise. "These measures would diminish the level of black economy and reduce the gaps between haves and have-nots," he said.
The LCCI President, meanwhile, called for simplification of tax procedures that had become so complex that a simple businessman preferred to bribe a tax official instead of coming into the tax net and quite often it happened that he paid more money in bribe than the actual tax. For the sake of promotion of industrialisation in the country and to bring down the graph of unemployment, the government would have to simplify the tax procedures, he maintained.
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