Pakistan Businessmen and Intellectuals Forum's (PBIF) president Mian Zahid Hussain has said that elimination of black economy was vital for broadening the tax base, facilitating trade and investment, reducing cash economy and corruption. Hailing the recently announced Voluntarily Tax Compliance Scheme (VTCS), he said that the business community will always extend its cooperation to the government in the larger interest of the country's development.
He expressed his optimism that VTCS will not only help bridge fiscal deficit but would also help in broadening the tax net. He was of the view that around 70 billion dollars, part of current black economy of Pakistan which is estimated to be around 30 per cent of gross domestic product (GDP), could be converted into formal economy through this `unique' amnesty scheme.
He said that revenue losses incurred by national exchequer due to undocumented economy are offset by the Federal Board of Revenue by imposing huge taxes on the formal sector, although such measures are unjustified and create impediment toward broadening tax base. Underscoring the need for simplifying complex laws, he said that the business-friendly steps of the incumbent government must be appreciated. The PBIF chief said that government with a view to promoting business and economy has defined a roadmap for the FBR which used to harass business community for achieving their tax collection target.
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