Mohammad Adnan Jalil, a prominent entrepreneur and former vice president, Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has called for complete overhauling of the national taxation system to abolish or merge other taxes to collect only two income and GST.
Talking to the media, he said that the tax filers are registered with income tax and GST. Therefore, other taxes that are included banking sector and other heads should be abolished and GST should be cut down to the ratio of 5 to 7 percent to levy it across the board excluding health and education sectors.
He said that in the year, 2014, the federation had given its stance on national budget through presenting a shadow budget before then federal government. At that time the FBR was used to collect Rs 300 billion or above in head of GST at the rate of 17 percent whereas the federation given a formula of standardizing it at the rate of 5 to 7 percent and its imposition across the board can help the collection of Rs 1000 billion under the head.
Mohammad Adnan Jalil is the son of late senior ANP leader and former KP Finance Minister, Haji Mohammad Adeel. He has studied business administration from the United Kingdom.
He said that the government is now required to take some bold steps and all those steps that would prove in the greater interest to serve the interest of the country and nation. Otherwise, he feared the country is moving towards hyper inflation and way out from that situation would be highly difficult.
He said that the economists and politicians sit together and workout will bring the economy back on its feet and achieve huge collections. However, he said that obviously when the number of taxes is more and the ratio is also high, the tax amount also remain high then tax evasions also occur.
The best formula to come out of the prevailing is cut in the ratio of tax and expanding of the tax net. He said that Thailand and other countries have adopted the same formula, which could be studied and followed.
To a question, regarding the upcoming national budget, he said that in our country new taxes are always levied wherein either the ratio of 5 taxes is cut down and the ratio of 10 have been increased. So the budget seems a mixture of statistics based on plus and minus and never based on practical steps.
Therefore, he urged the government to take bold and drastic steps to decrease, simplify and regularize unimportant taxes. For this purpose, he urged the government to consult trading bodies and FPCCI to include their input in the coming budget and bring improvement in economy.
He said that overall national economic situation is not positive and depreciation of rupees is bearing highly negative impact on payments on mark-up on foreign debts and balance of payment. He also expressed concern over the present current account deficit and said that the recent 35 percent depreciation of rupee has resulted in merely 1.8 percent increase in exports.
Similarly, he said that our direct taxation is only 12 percent of GDP, which is in proportion to only 5 percent of the population that is not viable and feasible statistics for a 220 million nation. He said that if the government is really serious then it should have to broaden the tax net to potential tax payers.
For the achievement of the goal, he said both federal and provincial level should have to tune up their taxation and economic policies to tackle the prevailing situation. The existing policies are not only unworkable, rather building pressure on the existing tax payers.
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