KARACHI: The Budgetary measures announced on 11th June by the government carry some harsh and apparently unrealistic measures for broadening of tax base.
According to Karachi Chamber of Commerce & Industry (KCCI), through an amendment to Section 8 (Sub-Sec.1, Clause M) of Sales Tax Act 1990, it is now mandatory for the supplier of goods to provide CNIC number of unregistered buyer of raw materials and finished products, effectively placing the responsibility to identify non-filers on the shoulders of compliant taxpayers.
It was pointed out that with a dismally narrow tax base of Sales Tax registered persons comprising hardly 35000 in number, it is virtually impossible for the importers, manufacturers and suppliers of goods to find registered buyers or those willing to provide their CNIC details.
Consequently the inventories of unsold goods with traders, stockists, importers and manufacturers are piling up, blocking their entire working capital as well as the funds borrowed from banks. The overnight change has put entire trade and industry in a quandary as to whether or not to continue in business because it is simply not possible to find registered buyers or those willing to provide their CNIC.
KCCI and other trade bodies are overwhelmed with complaints from traders, importers, manufacturers and dealers to take up this serious issue with Finance Ministry and FBR to find a workable solution immediately to pre-empt a crisis within the trade and industry, he added.
President KCCI Junaid Makda, therefore, urged the Advisor to PM on Finance, Revenue & Economic Affairs Dr. Hafeez Shaikh and Chairman FBR Mr. Shabbar Zaidi, to review the provision of CNIC, taking into account the ground realities of Pakistan’s economy and withdraw the condition to provide CNIC details of unregistered buyers in Sales Tax Invoices as it is not possible to comply with the condition with immediate effect.
He further urged the authorities to defer the proposed measure for at least one year so as to facilitate a gradual transition from current procedure and to help release the working capital of entire supply chain which is currently blocked.
Already the economic activities are very slow and such measures will further aggravate the situation. Since the Chairman FBR has formed the anomaly committee which includes representatives of business community, the matter will also be raised with the meetings of committee along with other major anomalies which exist in the Budget 2019-20, he assured.
