The Lahore Chamber of Commerce and Industry has urged the Federal Board of Revenue (FBR) and Punjab government to announce the withdrawal of discretionary powers of tax and Customs officials. The LCCI President Sheikh Muhammad Arshad on Tuesday also asked for withdrawal of withholding tax on banking transactions and Punjab Infrastructure Development Cess (PIDC) for giving a boost the businessmen's confidence.
The policy markets may consider these issues trivial but their impacts would be higher than the hopes once the FBR and Punjab government make announcement of withdrawal. The business community is doing business in hostile condition. Discretionary powers of tax and customs officials, withholding tax on banking transactions and attachment of business bank accounts are distressing them on the one hand while issues like Punjab Infrastructure Development Cess (PIDC) are adding to their miseries on the other.
He said that business community was hoping some major announcements in this regard in the Federal and Provincial Budget 2016-17 but all expectations ended with discouragement. He said that boom of trade and economic activities could generate more revenue than the FBR and Punjab government are expecting from withholding tax on banking transactions and Punjab Infrastructure Development Cess.
He said that discretionary powers of tax and customs officials should be withdrawn as there is no need to grant undue powers to taxations officers. He said that discretionary powers have only opened up the floodgates for misdoings instead of raising government revenues or increasing the number of taxpayers. He said that unnecessary interference of tax officials in the businesses is also increasing depriving them of peace of mind needed to focus on expansion of businesses.
Sheikh Muhammad Arshad said that the FBR should stop attaching business accounts in the larger interest of the economy. He said that attachment of business accounts is pushing the taxpayers to the wall. He said that the attachment of the bank accounts should be the last option but the RTOs/LTUs are wasting no time in taking punitive action to meet the revenue targets. He said that the FBR should focus on controlling under-invoicing and curbing the menace of smuggling besides expanding tax net but it is playing arm-twisting by instituting cases for recovery of outstanding dues and attaching bank accounts.
He called for immediate withdrawal of withholding tax on banking transactions saying that this sort of taxation is hitting the trade and industry hard. He said that policy corridors have not shown any laxity on this issue which is hampering the trade and economic activities. He said that imposition of withholding tax on banking transactions have forced business community to conduct its monetary transactions in cash.
The LCCI President also urged the Punjab government to withdraw Punjab Infrastructure Development Cess immediately as this is double taxation and bound spoil the business activities in Punjab. He said that businessmen of the province would leave with no other option but to get their consignments cleared from other provinces and dispatch to the required destinations directly which would ultimately occur huge loss to the economy of Punjab.
He said that the federal and provincial governments should give a free hand to the business community in the larger national interests because issues like misuse of discretionary powers of the FBR officials, withholding tax on banking transactions, attachment of business accounts and PIDC are hindering the smooth working of the trade and industry.