Chairman Federal Board of Revenue (FBR) Tariq Mahmood Pasha has admitted that the regulatory duty list contains some analytical errors which will be rectified soon by revising it. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI), Pasha termed the business community and tax collecting authority as partners.
He assured to ponder upon KCCI's suggestions in dealing with some of the pressing issues pertaining to revision of regulatory duty on imported items, refund claims, audit discretionary powers and other serious issues being faced by the business/industrial community.
He also advised KCCI to formulate different committees in order to come up with workable solutions for dealing with numerous taxation issues, budgetary measures, refunds claims, audit or any other issue. "Without taking the business community into confidence, the taxation system cannot move forward," he said.
Tariq Pasha said that FBR has witnessed growth in its revenue collection. He said the credit for this growth could be attributed to the government's initiatives and improved performance of numerous domestic sectors including the manufacturing sector. A total of 1,075,000 returns have been filed as on December 19, 2017, indicating an upsurge of 26 percent as compared to last year, he referred.
The FBR chairman offered that to deal with pending refund claims, FBR can pick up 100 cases of substantial refunds on random basis whose refund payment orders have not been issued and are blacklisted or deferred. He said these cases would be brought to relevant Associations' notice in order to probe their genuineness and upon certification by the concerned Association, FBR would decide these cases.
Commenting on concerns expressed by participants of the meeting over massive discretionary powers to FBR officers which were grossly being misused, he said that all such discretionary powers couldn't be completely removed but he would ensure that these discretionary powers are minimized.
He said he was personally not satisfied from the audit which should only be used as a tool for deterrence. In this regard, he advised KCCI to give suggestions on how to improve the audit procedures.
In response to concerns expressed by KCCI members over lack of coordination between FBR and Sindh Revenue Board, Tariq Pasha said that both revenue authorities were now working closely to resolve numerous taxation issues.
He assured he would again visit Karachi Chamber in January 2018 to thoroughly review and further discuss KCCI's suggestions on how to deal with taxation issues being faced by the business community.
He assured that section 176 would also be reviewed in order to provide relief to the business community.
BMG's vice chairman Zubair Motiwala pointed out that although regulatory duty (RD) was imposed to lessen the imports and enhance the exports but its imposition on basic raw materials would prove to be counterproductive as the exports would descend. He said many importers of raw materials were not finding it feasible to clear goods from ports at such exorbitant rates after the imposition of the RD, hence, the FBR has to review the unjust RD on raw material in consultation with stakeholders.
"Instead of imposing RD, the government should prefer making the manufacturing sector stronger," he said urging that a substitute be introduced for the imports within the country, which would be the right approach. He suggested that the FBR, prior to taking action against any businessman or industrialist, should take the relevant association on board which would yield positive results and build a stronger relationship between the taxpayer and tax collector.
Ex-president KCCI Haroon Farooki pointed out that strategies adopted by FBR in 2013 with the spirit to improve the tax base, made all the filers withholding agents but unfortunately, this step resulted in descending the number of returns filed from 1.55 million to less than 1 million with a depreciation of 125,000 filers each year since 2013.
"Out of the total filers: less than 1 million, around 600,000 are salaried class whereas the returns being filed by the business segment continue to decline since 2013," he said, stressing this has to be reviewed in the next budget and the non-corporate sector should be treated separately on experimental basis, which might result in improving the tax base of the country.
He was of the view that the business and industrial community suffers badly throughout the year due to frequent issuance of SROs and amendments which have to be stopped. He said the controversial section 176 of the Income Tax Ordinance was badly being misused which was followed by just one notice comprising of at least 15 demands which was tantamount to the complete audit.
Former President KCCI Anjum Nisar also expressed deep concern over the imposition of RD on many items which simply couldn't be treated as luxury items as many of these items were being used by every household across the country for daily consumption therefore, FBR should withdraw RD on such items.
He further advised the FBR to take recommendations of Tax Reforms Commission into consideration while devising different taxation policies, besides underscoring the need to revisit the obsolete procedures being followed by the Valuation Department whose efficiency has to be improved in consultation with stakeholders.
Incumbent president of KCCI Muffasar Atta Malik appreciated FBR chairman Tariq Mehmood Pasha over his visit to the Chamber after a passage of more than 3 years. He hoped that FBR would now pay attention to KCCI's opinion and its suggestions which were being given in the larger interest of the entire business/industrial community.
He further assured Pasha on KCCI's keenness to work together to not only resolve issues faced by businessmen but would also work with the FBR to enhance the tax compliance culture. Businessmen Group vice chairman and ex-president KCCI Tahir Khaliq, senior vice president Abdul Basit Abdul Razzak, vice president Rehan Hanif, former presidents Haroon Agar, Abdullah Zaki, Iftikhar Vohra and Shamim Ahmed Firpo and members of KCCI Managing Committee also attended the meeting.
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