The Federal Board of Revenue (FBR) Chairman Nisar Muhammad Khan has said the genuine grievances of the business community would be addressed once budget proposals of the Lahore Chamber of Commerce & Industry (LCCI) are received. He was talking to the LCCI delegation, led by its President Abdul Basit. He said that no one else could be interested in development of trade and industry than the FBR as revenue would automatically be increased if businesses flourished.
The government needs revenues to run its affairs smoothly and tackle the security and poverty challenges, he said. The number of provincial taxes is much higher than the federal taxes; therefore, the business community should take up this issue with their relevant governments. He informed the delegation that tax-free import is allowed to only machinery and equipment for China-Pakistan Economic Corridor (CPEC) adding the raw materials have been excluded by the government from this list on the request of FBR.
On the issue of 38-B of the general sales tax, he said that tax officials have been directed to treat the business community with due honour, he added. LCCI President Abdul Basit said that number of taxes and frequency of paying taxes must be reduced. Moreover, taxes may be paid quarterly instead of every month. For that matter, all Para tariffs must be merged in the main tariffs, he said.
Similarly, there should be electronic communication between taxpayers and tax departments. These proposals can make noticeable difference and win the confidence of taxpayers. The government must ensure that Chinese investors and companies engaged in CPEC must consider the indigenously produced inputs. The goods which are not manufactured / produced in Pakistan, for example, soybean meal and grandparents chicks should not be taxed, he said.
He said that Section 38-B of Sales Tax Act, 1990 is being adversely used by the officials of Tax department. They are paying illegal visits to markets and godowns to harass the business people without any justification. He suggested that teams from Tax department should visit the markets, if indispensable, but they should be bound to follow due legal process and immediately stop harassing business community.
"Bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing from the Commissioner. The recovery should be after the decision of the Tribunal and not before that. Finances of business people in their bank accounts help sustain their business. He said the alternative dispute resolution mechanism has to be strengthened and the FBR must accept its recommendations.
He proposed that instead of bringing changes in Customs values, duty/tax rates should be rationalised which would certainly be more effective to increase government revenue. The exporters are facing serious issues including shortage of working capital. All the backlog of refunds should be cleared within two months after filing of the income tax return. The FBR should pay mark-up at bank rate to the person whose refunds are stuck up by the department for onward deposit against the bank's loans.
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