LAHORE: President of the Lahore Chamber of Commerce & Industry (LCCI) Sheikh Muhammad Arshad has said that it would be hard for the economy to grow in the presence of major issues like double taxation and undue delay in refund claims therefore government should resolve these issues as soon as possible.
He was talking to a delegation of Liberty and other major markets led by Irfan Iqbal Sheikh here at the LCCI. The LCCI vice president Nasir Saeed also spoke on the occasion. Traders who attended the meeting were Yousaf Khan, Hafiz Ameer Ali Awan, Umer Chaudhry, Mian Zahid Javed, Nasir Mahmood, Mian Muhammad Farid, Ghulam Mustafa, Abdul Majeed, Aas Muhammad, Ihsan Anjum, Tariq Mahboob, Kamran Saleem, Sohail Sarfraz Munj, Dr. Masood Alam, Ismail Khan, Ahsen Mahmood, Muhammad Anwar Bajwa, Asim Bashir, Roy Zafar, Rana Bashir Ahmed, Mukhtar Ali, Javed Iqbal Siddiqui, Zahid Maqsood Butt, Asim Javaid, Masood Nizami, Imran Iqbal, Farhat Majeed Adil, Rasheed Roy, Rizwan Shamsi and Rehmatullah Javed.
The LCCI president Sheikh Muhammad Arshad urged the Federal Board of Revenue (FBR) to pay attention towards double taxation which has become a major hurdle in the running of smooth businesses. He said that after 18th Amendment, provinces have developed their own legislations and rules for the administration of Sales Tax on Services. It is argued in the light of various international studies that the ideal Sales Tax system is perhaps a uniform national one where the distinction between commodity (goods) and services is artificially eliminated and the system is made uniformly and seamlessly applicable on both goods and services across the country. He said that however, as this ideal appears to be a non-practical venture in Pakistan where provinces are determined to manage the collection of sales tax on services at their own level with constitutional backing. He said that keeping in view of this a uniform system can be worked out by the FBR and provincial authorities collaborating to streamline the tax treatments and rates to ensure a more uniform atmosphere for the businesses which will in turn result in increased GDP and therefore the resulting taxation revenues.
The major issues faced by the taxpayers at present due to non-collaborations between various taxation bodies (FBR, PRA, SRB, etc.) are jurisdiction disputes, double taxation between provinces, non-uniformity of provincial laws, structural issues in Provincial Revenue collection bodies, and overall lack of collaboration and harmonization
The LCCI president suggested that in order to facilitate the taxpayers, the business environment and thereby the provincial economies, there should be harmonization and collaboration between Provincial revenue collection bodies (PRCB) as well as with the FBR, standardization of general tax treatments in the jurisdictions of various PRCB and FBR, standardization of sales tax rates across industries and sectors in the jurisdictions of various PRCB and FBR, resolving structural issues and capacity building at PRCB and FBR and resolution of “jurisdiction” disputes and agreement regarding provincial “double taxation” and differential “categorization” by PRCB and FBR.
Sheikh Muhammad Arshad also urged the Federal Board of Revenue to expedite stuck-up sales tax and income refund claims as this issue has caused shortage of capital to the industry.
He said the FBR is hampering the growth of the most productive sectors by denying the exporters and manufacturers their right of refund of Sales Tax and Income Tax.
The LCCI chief said that the delay in release of huge funds that runs into billions has triggered serious liquidity crunch for the exporters and manufacturers that might lead to closure of several industrial units.
The LCCI President said that the process to get refunds is so lengthy and cumbersome that sometimes takes months for a manufacturer or an exporter to get his own money refunded. He said that the businessmen were bearing huge financial cost on their own hard earned stuck-up money, therefore, the FBR Chairman should look into the matter and ensure early release of Sales Tax and Income Tax refunds.
The LCCI Chief urged the federal and Punjab governments to reduce the undue interference of departments like FBR, EOBI and Social security etc in the business activities to ensure business friendly atmosphere. He said that it would not only encourage the local investors and help trust building between the businessmen and government departments but would also air a good message to the foreigners. He said that least interference of the government departments could be ensured through one window operation.
Earlier, Head of the delegation Irfan Iqbal Sheikh called for simplification of taxation system. He said that a simplified and friendly taxation system would encourage businessmen to come into the tax net. He called for a tax-free budget for the year 2016-17 to achieve high economic growth. He said that increase in number of taxes always discouraged people to stay out of the tax net while cut in tax rates always expand the tax base. “Our government should rationalize tax tariffs instead of making any increase in their rates,” he added.
