The Federal Board of Revenue's (FBR) Audit Policy 2016 has a number of flaws that must be removed to address the genuine reservations of the business community. The point was raised at the meeting of Lahore Chamber of Commerce and Industry's (LCCI) Standing Committee on Finance, Taxation & Sales Tax here at the Lahore Chamber of Commerce and Industry.
Various issues including budget proposals, sales tax and income tax registration, establishment of help desk and complicated taxation system also came under discussion at the meeting.
LCCI Vice President Muhammad Nasir Hameed Khan said that lack of consultation on policy matter is one of the biggest reasons of trust gap between the business community and the government. The Federal Board of Revenue could attract more tax returns through policy reforms, he said, and added that the philosophy of considering fines and penalties as revenue measure is not logical and should be reconsidered.
Convener of the Standing Committee on Finance, Taxation and Sales Tax, Tanvir Ahmad Sufi said that FBR would have to satisfy business community on the Audit Policy 2016 which was announced without any consultation.
He suggested that conducting audit of salaried persons having no any other source of income should be excluded as tax is withheld and deposited by the employer. The cases of Final Tax Regime should be excluded from audit; dividend income, bank interest and rental income etc.
Sufi said such incomes which are exempted from tax like foreign remittances and agricultural income should not be audited. He said that share of partners in case of association of person (AOP)/partnership firm where there is no other income of partner should also be an exclusion from audit. The businesses whose audit has been carried out in last 3 years should not be considered for audit, he added.
The committee also decided to invite all the chief commissioners one by one to take up important matters of the business community.
It also urged the Federal Board of Revenue to establish a help desk at LCCI for sales tax registration, income tax registration and change of particulars.
The committee members said that assessment mechanism should be established by the Federal Board of Revenue. The members said that local investors should be encouraged in China Pakistan Economic Corridor Project (CPEC) and a well-balanced federal industrial policy should be formulated to in this regard.