Taxation system needs reforms based on ground realities: LCCI

Taxation system needs reforms based on ground realities and due consultation process with the stakeholders to ensure result-oriented policies for the businessmen. Harmonization in tax system across the country is also a must to get rid of the issue of dual taxation. The Lahore Chamber of Commerce and Industry (LCCI) President Malik Tahir Javaid said this in a statement on Wednesday. Though amnesty scheme is good step to bring out-of-country capital into the country but these cannot be productive until and unless major issues like "withholding tax on banking transactions" exists, he opined.
He said that over the years FBR could not satisfy all its stake holders ie the State as well as tax payers with 1.2 million filers out of total population of 210 million fetching hardly revenue collection of 12-13 percent of the GDP and unhappy stakeholders across the board, speaks of FBR's failure so far. It is further repeated from the international ranking of paying taxes, which is at present 172 out of 190 countries of world which indicates very unhappy situation, he added.
He said that it is a matter of serious concern that with the existing narrow tax-base, the policy makers instead of revolutionize the tax policy options, seems defendant on the burdening of the existing taxpayers whether corporate, salaried, individuals and certain other documented sectors of the economy. He said that repetition of such policy option coupled with unbridled withholding tax regime, tariff structures leading to protectionism and creating hurdles to make in "Pakistan's Agenda", to promote the domestic industry is perhaps the major obstructing and responsible factor for all difficulties be faced on economic front at present.
LCCI President was of the view that various distortion in the existing tax policies can be removed if the feedback of all the representatives of business organizations is given due consideration by the FBR authorities. It is universally admitted fact that public policy makers can make noticeable difference by linking their mindset to ground realities.
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 unjustifiably harass the business people. They not only take coercive measures to raise unlawful tax demands without providing any supporting document but also carry all the available records with them.
The tax department should visit the markets, if indispensable, but they should be bound to follow due legal process and immediately stop harassing business community. FBR may convene a meeting to be attended by all the Chambers of Commerce, prominent representatives' bodies, associations and may lay down uniform and transparent policy guidelines for the field formation, he added.