LAHORE: The Association of Chartered Certified Accountants (ACCA), in its budget proposals, has asked the Federal Board of Revenue (FBR) to focus on broadening the tax base, structural reforms, direct taxes and indirect taxes.
In line with the overall impact on the economy, treasury and the principles of fairness and justice, the measures targeted a reduction in reliance on indirect taxes, utilisation of Nadra and withholding tax databases, declaration of formalised asset valuations with fair market values and lowering corporate tax rate.
Amendment in Section 111 (4) foreign exchange remitted from outside Pakistan should be amended to any amount of foreign exchange remitted from outside Pakistan through normal banking channels that is cashed into rupees by a scheduled bank and a certificate bank should be produced with a declaration and evidence of the source of funds.
This will continue to promote the inflow of foreign exchange remittances towards the country while stopping the misuse of the provision to whiten/launder black monies and de-incentivising genuine taxpaying businesses.
Section 153(4) empowers the Commissioner Inland Revenue for issuing Exemption Certificates in cases where the underlying payment is not chargeable to tax due to various reasons; however, this provision should also be inserted in Section 152 to facilitate the business with non-residents companies/businesses where the underlying payments are not chargeable to taxes as the current backlog of refunds creates undue stresses on businesses.
The current rate of the minimum tax in Section 113 is one percent, which should be brought down to 0.4 percent, the ACCA suggested.
While in sales tax and federal excise duty, the existing rate of sales tax is 17 percent, which is one of the highest in the region with 12.36 percent in India, and 10 percent in Indonesia. This should be brought down to a single-digit. The ACCA also proposed that the sales tax should be used to broaden the tax base and to avoid the net negative costs for economy.
