Presidents of Karachi, Rawalpindi, Khyber Pakhtunkhawa and Islamabad chambers of commerce and industry have proposed to National Assembly Standing Committee on Finance to drastically cut tax rates specifically sales tax rate to attract investment and reduce cost of doing business in next budget (2015-16).
The meeting of the sub-committee of NA Standing Committee on Finance was held here on Thursday under the chairmanship of Qaiser Ahmad Sheikh. FBR team headed by Senior Member Tax Policy Inland Revenue Shahid Hussain Asad was present. The representatives of chambers and commerce submitted their proposals to the sub-committee. Sharing budget proposals for 2015-16, President of the Karachi Chamber of Commerce and Industry (KCCI), Iftikhar Ahmed Vohra said that the KCCI fully supports the initiative of the FBR to broaden the tax base. At present, smuggling of billions of dollars is taking place and if the government brings down the tax rates, the cost of smuggling would raise and documented imports would subsequently increase.
Referring to the Pak-China trade, he said that there is a discrepancy in the Pak-China exports data. According to him, exports of China to Pakistan stood at $11billion whereas as per Pakistan's data, imports from China amounted to $6.5billion, reflecting discrepancy due to under-invoicing and possible smuggling.
He requested the tax authorities that the discretionary power given to the Inland Revenue officers has created serious problems for the business and trade. At present people are very disappointed over the attitude of the IR officers, who are using discretionary powers to harass the taxpayers. Being President of KCCI I receive a large number of complaints against the IR officers at Karachi, which is alarming. He alleged that tax audit have been cleared by the auditors after taking Rs 1-3 lakh as bribe.
He suggested that there should be a focal person in the FBR who should promptly respond to the queries of the business and trade. Presently, the FBR's orders are not implemented in the field formations. He also inquired about the next date of the meeting of the Tax Reform Commission.
Syed Asad Mashhadi President RCCI said that higher tax rates are major hurdle in BTB exercise of the FBR. It is a reality that some importers are indulged in under-invoicing due to higher tax rates on imports. He also suggested single-digit sales tax rate in coming budget (2015-16). When he suggested restoration of turnover tax, Shahid Hussain Asad stated that who would determine the actual turnover of the businesses. FBR Member Inland Revenue Operations Muhammad Ashraf Khan said that the turnover tax was applicable in the past.
President KP Chamber of Commerce and Industry Fuad Ishaq said that if the government imposes restriction or higher taxes on banking instruments, it would flourish Hawala and Hundi business. People would take out their money from banks and decision would have serious implications on the economy.
He suggested that the tax rates should be drastically bring down in budget (2015-16). The government should allow exports in Pakistani currency. President Islamabad Chamber of Commerce and Industry (ICCI) suggested that the income tax return form should be simplified. Presently, the form is very complicated and needs to be issued in Urdu language.