ISLAMABAD: Traders leaders on Thursday demanded of the Federal Board of Revenue (FBR) to simplify taxation system to broaden the tax base (BTB). They urged the FBR to reduce the sales tax rate to single digit to bring further taxpayers in the tax net.
While submitting their proposals before the Sub-Committee of the National Assembly Standing Committee on Finance and Revenue here, four presidents of major chambers of commerce and industry namely Karachi, Rawalpindi, Islamabad and Peshawar, also pressed the FBR to take stringent measures to check smuggling in the country.
They proposed establishment of Customs Cell or Desk of Afghan Customs at Karachi Ports to collect customs duty for Afghan government on entire transit trade goods bound for Afghanistan. This practice will increase the cost of Afghan goods for smugglers and they will not smuggle goods imported in the name of Afghan transit trade agreement.
President Islamabad Chamber of Commerce and Industry (ICCI) Muzamil Hussain Sabri asked the FBR to stop pressurizing the existing taxpayers by frightening them to pay more and more taxes. Instead, FBR must focus on bringing new taxpayers in the tax net.
He said that people wanted to pay taxes but FBR should ease and simplify the tax forms and procedures. Presently, businessmen are unable to understand the complexities of tax forms and they are forced to pay heavy fees to advocates to fill the tax forms. Being frightened of tax officials, majority of people either tend to pay bribe to tax officials or abstain depositing taxes in due quantity.
He was of the viewpoint that common traders and businessmen were normally educated and they were not able to understand and fulfill all the clauses of tax forms which had been prepared by chartered accountants firms. In this way these firms opened up way to their businesses but have pushed the common businessmen into a mess. Therefore, tax forms must be published in Urdu language to make them tangible for common traders. Moreover, higher rate of sales and other taxes also force tax payers to pay taxes, therefore, sales tax must to be lowered to single digit.
President Rawalpindi Chamber of Commerce and Industry (RCCI) Syed Assad Mashhadi also termed the higher rate of taxes as main hurdle in the broadening of tax base. Entire tax structure must be reformed and reviewed to attract more people in the tax base. He proposed imposition of 2% sales tax on average turnover of retailers and assured full support to FBR in assessment of turnover of retailers.
President Khyber Pakhtunkhwa Chamber of Commerce and Industries President, Fawad Ishaq proposed fixation of tax rate for five years time to grant confidence to taxpayers in the tax policies. There is no justification for collection of sales tax on the basis of electricity bills because businessmen with heavy profit turnouts often use lesser electricity and commit tax evasion.
Exports to Afghanistan and other countries must be allowed in Pakistani currency because biding of use of dollar in this regard increases 5% cost of exports. Similarly, tax deduction from bank transactions will also lead towards the non bank transactions. Moreover, use of CNIC must be made conditional for ever bank transaction.
President Karachi Chamber of Commerce and Industry (KCCI) Iftikhar Bohra said that smuggling was inflicting loss of Rs 15 to 20 billion to national economy. To avoid under invoicing, mechanism must be devised because Chinese data base reveals exports to Pakistan $11 billion but according to our data Pakistani imports from China are not more than $6 billion. He proposed establishment of Afghan Customs desk at Karachi to collect customs duty for Afghanistan. It will increase cost of goods of Afghan transit trade to the level that smuggler will not smuggle in Pakistan.