The reform policy introduced by the Central Board of Revenue (CBR) four years ago had not only broadened the tax base but the tax collection had also increased.
These views were expressed by Mukhtar Ahmed Gondal, director general, Large Taxpayers Unit (LTU), Karachi, while addressing a post-budget seminar organised by Institute of Chartered Accountants of Pakistan (ICAP) here on Wednesday. He said that the government had planned to restructure the corporate sector in the Federal Budget 2007-08.
He said the government had taken measures to consolidate the corporate sector by introducing the concept of holding companies adding that revenue collection in the head of direct taxes measures any emerging economy and in Pakistan this head having 42 percent of total collection.
CBR considering the growth of direct taxes had increased the budgetary target from Rs 265 billion to Rs 318 billion in the current fiscal year, he said, adding this would be achieved easily.
Gondal said the CBR had conceived and implemented the reform process four years earlier and now its positive results could be seen. The reform policy was introduced to make responsible the taxpayers, tax officials and other stakeholders to increase tax compliance.
He said the annual growth in revenue collection had proven that responsibility had been shifted to taxpayers and they realised their contribution was necessary for country's economic growth. He said that new laws in the budget were introduced to remove anomalies for providing maximum relief to taxpayers and impediments in the way of economic growth. He said that seventh schedule was proposed in the Finance Bill for banking companies, which would provide laws related to this sector at one place.
Syed Masud Ali Naqvi, senior partner KPMG Taseer Hadi and Co, Ibrahim Siddat, partner Ford Rhodes Sidat Hyder & CO, Shabbar Zaidi, partner AF Fergusons & Co were the speakers. The speakers discussed the economic aspects of the budget, gradual abolition of presumptive tax reducing the cost of doing business and indirect taxation, providing space for the private limited companies to grow, providing space for documentation in the real estate sectors, reducing possibility of interaction and litigation with tax authorities.