LAHORE: There is an urgent need of reforming and simplifying customs duty and taxation system with the consultation of real stakeholders, besides addressing the issue of double taxation through integration of provincial and federal governments laws and harmonization of FBR and Punjab Revenue Authority (PRA).
These views were expressed by the Pakistan Industrial & Traders Association Front prominent leader Engr. Sheikh Sajjad Afzal, who is also the elected member of Lahore Chamber of Commerce and Industry (LCCI) executive committee.
In his federal and provincial budget proposals for 2020-21, submitted to the Federal Board of Revenue, he suggested that taxes should be charged one time by any provincial or federal government, as provinces levy same kind of tax which the federal government has already imposed, escalating the cost of production and discouraging the registered manufacturers as well as the commercial importer. He called for harmonization of sales tax and income tax laws, getting rid of those provisions which conflict with each other, suggesting to enhance tax base by automation and integration of tax agencies with other public entities.
He said that high tariff of utilities, RD’s on raw material, FTA’s with China without any working and high interest rate are the major factors discouraging exports.
Sheikh Sajjad Afzal said that coordination between the government and the private sector was vital for economic growth, proposing the government to develop policies that could provide conducive business environment in the country.
He called for strict measures to stop illegal trade, as the smuggling is not only causing massive shortfall in revenue collection but also discouraging the legal businesses and documented economy. “Majority of the people don’t want to get them registered and preferred purchasing of smuggled goods mainly due to high duties on legal import, besides the benefits of no invoice, no record and no audit.”
The PIAF leader warned that mere stopping of smuggled items in the market would not yield results but there is a need to take stringent measures at border along with Iran and Afghanistan to curb smuggling in cooperation with customs, Rangers, coastal guards and armed forces of Pakistan.
Sheikh Sajjad Afzal asked the government to conduct study through chambers and registered associations sector wise like textile, engineering, food, real estate etc. “This data will help allocation of products which needs higher tariff to discourage import and which needs relaxation to run the existing local Industry.” He suggested the government to follow Chinese policy of producing high volumes at low price, calling for reducing sales tax figure to single digit.
He said that turnover tax was at Rs10 million and now reduced to Rs3 million, which should be brought to previous level due to devaluation of currency and high rate of utility in the region.
