The federal government through its budget 2019-20 has badly squeezed the neck of salaried class, imposing heavy income tax (up to 35 percent) on 75 percent of the working class of the country.
These views were expressed by panellists during discussion moderated by Haider Ali Patel during post-budget seminar jointly organized by Pakistan Tax Bar Association (PTBA) and Karachi Tax Bar Association (KTBA) at local hotel here.
The panelists were Masoud Ali Naqvi, chairman Tax Reforms Implementation Committee (RTC), Abdul Qadir Memon President PTBA, Mohammad Rehan Siddiqui, President, KTBA and Muhammad Zubair Motiwala, former president KCCI.
Commenting on the proposed amendment in sub-section (7) of section 3 to extend withholding tax by the buyer specified in the Tenth Schedule to the Act, Naqvi said that the government should have announced reforms package instead of amendments.
He suggested the government to take all political parties and business community on board to develop a national consensus for five-year reforms plan. He further said that there was a huge trust deficit between taxpayers and taxmen hence the government should also revisit its measures to create strong working relations among the stakeholders.
Abdul Qadir Memon said that instead of imposing additional penalties along with 100 percent increased rate on non-filer, the government should only have proposed tax collection at hundred percent increased rate from non-filer and added that it would make procedure complicated. He termed the automation as the only solution, saying that if the FBR got all information through CNIC, then there was no need to ask for further personal details.
Talking about the amendments made in different sections of the Acts, he said that these amendments would not yield desired results as the government could not attract new taxpayers and he also raised questions on its implementation in true spirit.
He said that Pakistan was the only country where three different property valuations (FBR value, collector value and market value) were enforced and urged the government to initiate dialogue for uniform property valuation.
Rehan said that although tax measure taken for real estate sector in this budget would deter parking untaxed and ill-gotten money in this sector, the government should have penalized the non-filers, intending to invest in real estate sector.
Zubair Motiwala said that five export-oriented sectors, which were 80 percent of total exports, would face adverse impact particularly SME sector after the withdrawal of zero-rated facility and added that this measure would pile up tax refunds up to Rs 450 per annum approximately and how the government would refund such hefty amount on annual basis however they were presently unable to release pending tax refunds and offered bond to settle the issue. Furthermore, he said that with 17 percent sales tax on five export-oriented sectors, the government would be dragging the industry towards disaster.
Earlier, Adnan Mufti and Salman Haq gave electronic presentations on the amendments made by the government through Finance Bill 2019 in the laws for direct and indirect taxes.
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