The business community of the country has sought Rs 800 billion worth budgetary concessions, exemptions and tax reductions for the next financial year 2019-20 as compared to estimated tax expenditure of over Rs 680 billion during 2018-19. This was stated by Dr Hamid Ateeq Hamid Sarwar, Member Inland Revenue Policy, Federal Board of Revenue (FBR), while briefing the National Assembly Standing Committee on Finance and Revenue which met here under the chairmanship of Member National Assembly (MNA) Faizullah.
Out of total tax concessions and exemptions to the tune of over Rs 680 billion, the annual tax expenditure was Rs 540 billion. The PML-N annual budget 2018-19 cost Rs 100 billion and the Second Supplementary Finance Act cost Rs 40 billion to the national exchequer. In 2017-18, the cost of exemptions was Rs 540 billion.
The member FBR on a query stated that the government will present federal budget 2019-20 on May 24, 2019, adding that the government has also approved amnesty scheme on Tuesday and a subcommittee has been constituted to further deliberate on the subject.
He said that at present the government is providing Rs 540 budgetary concessions to business community.
Countrywide chambers of commerce and industries as well as Federation of Pakistan Chamber of Commerce and Industry presented their budgetary proposals before the panel. All the chambers of commerce and industry were unanimous on bringing ease of doing business to steer the country out of current economic problems and putting Pakistan on economic development.
Zubair Tufail, former President FPCCI while expressing serious concerns over declining exports said that it is a worrisome situation for the country as massive depreciation of Pakistani rupee couldn't help improve exports. He said that depreciation of rupee will not serve the cause until the government improves the ease of doing business environment. He said that investors, especially foreigners, will not bring investments in the country till they are provided a business-friendly environment, saying at present there are multiple taxes in place on Pakistan. The government must rationalise taxes and bring down the number from 92 to 5 and the FBR should also simplify filing of tax returns, otherwise people will not prefer to become filers.
Member committee Dr Aisha Ghaus Pasha asked how Pakistani exports could be increased and what part business community can play in bringing new investment to the country. Zubair said the government must facilitate manufacturing sector and should give tax exemptions for 10 years to fresh investors, saying that it will not only generate new jobs but will also play a critical role in sustainable growth of the country.
He pointed out that there are no taxes on the import of raw material being used in value-added industries of the neighbouring countries. Moreover, input costs including power supply is being provided to the industries on special rates while in Pakistan fuel prices have seriously disturbed the manufacturing sector.
He said that in Karachi, per unit cost of electricity for domestic consumers has soared to Rs 21 per unit and the same is the situation with industries. Responding to a question of Haji Jamaluddin of Chaman Chamber of Commerce and Industry on Pakistani exports to Afghanistan and Central Asian countries, the FBR official said that Afghan authorities are creating hurdles for Pakistani businessmen exporting goods from Pakistan to Afghanistan. The official said that the Afghan government wants Pakistan to open the Wagah border for Indian traders to supply their goods to Afghanistan.
Jamaluddin also said that Pakistan has a great potential to increase volume of trade with Afghanistan to the tune of $10 billion, adding that goods and services worth billions of dollars could also be supplied to Central Asian countries as well as Iran for which a conducive business environment is required.
The FBR officials said that they will sit together with the trade bodies of Balochistan to find out ways to improve trade ties with Afghanistan.
The representatives of the business community also underscored the need for broadening the tax net by bringing more retailers, professionals, such as lawyers, doctors and consultants, and real estate sector into the tax net. They said that widening the tax net will help generate revenue, adding that the government must reduce the General Sales Tax (GST) level from 17 percent to 15 percent, saying it will not disturb the tax collection but help increase the revenue collection as the move will enable people to purchase more goods. The business community also asked the FBR to reduce corporate tax from 29 percent to 25 percent as well as reduce personal income tax to 20 percent. They said that small and medium enterprises should be promoted. The government should not sell land to Chinese investors but provide it on lease basis, they further recommended. The government must protect the rights of taxpayers and eliminate non-filer tax as it is not serving the purpose.
The committee discussed the issues pertaining to restoration of customs duty on the import of phthalic anhydride and directed the Federal Board of Revenue (FBR) to consider the said matter with stakeholders and chemical associations, and a report in this regard may be submitted to the committee within seven days. The Member (IR-Policy), FBR, informed the panel that a meeting was convened with Pakistan Tyres Importers & Dealers Association to consider the matter about regulatory duty on the import of tyres. The committee recommended that final report on the issue may be submitted within a week.
The parliamentary body jointly recommended the FBR to incorporate the budgetary proposals, received from FPCCI and Chambers of Commerce & Industry (Lahore, Karachi, Quetta, Peshawar, Sialkot, Gujranwala, Rawalpindi and Islamabad). The Member (IR-Policy), FBR, assured the committee that para-wise comments of the FBR on the proposals will be furnished within a week to National Assembly Secretariat for further consideration by the members of the committee.
The meeting was attended by MNAs Raza Nasrullah, Jamil Ahmed Khan, Faheem Khan, Nusrat Wahid, Dr Ramesh Kumar Vankwani, Qaiser Ahmed Sheikh, Ali Pervaiz, Dr Aisha Ghaus Pasha, Nafisa Shah, Syed Naveed Qamar and Abdul Wasay, besides the senior officers of FBR and different stakeholders.