LAHORE: Chairman Federal Board of Revenue (FBR) Nisar Muhammad Khan has said that genuine grievances of the business community would be addressed once budget proposals of the Lahore Chamber of Commerce and Industry (LCCI) are received.
He was talking to the LCCI delegation, led by its President Abdul Basit. Other members of the delegation were the LCCI Vice President Muhammad Nasir Hameed Khan, Tanvir Ahmed, Sheikh Muhammad Ibrahim, Adnan Khalid Butt, Mian Abdul Razzaq, Mian Zahid Javed, Tariq Mahmood, Ch. Khadim Hussain, Moazam Rasheed, Mian Muhammad Nawaz, Ali Hassan Ashghar, Shahid Nazir, Arshad Baig and Maqsood Butt.
Chairman FBR said that no one else could be interested in the development of the trade and industry than the Federal Board of revenue as if the businesses flourish, revenue of the department would automatically enhance. He said government needs revenues to run its affairs smoothly and tackle the security and poverty challenges.
He said that number of provincial taxes is much higher than the Federal taxes therefore business community should take up this issue with their relevant governments. He informed the LCCI delegation that tax-free import is allowed to only machinery and equipment for China Pakistan Economic Corridor (CPEC). Raw materials have been excluded by the government from this list on the request of FBR.
On the issue of 38-B, he said that tax officials have been directed to treat business community with due honor. The Chairman said that the FBR considers businessmen as partners and not adversary.
The LCCI President Abdul Basit said that the role of Federal Board of Revenue is considered as a key facilitator to private sector. But our experience shows that dealing with FBR, compliance and officials is not always easy. Tax system is complicated and burdensome which creates room for complicities between tax payers and the tax collectors. He said that number of taxes and frequency of paying taxes must be reduced. Moreover, taxes may be paid quarterly instead of every month. For that matter, all Para tariffs must be merged in the main tariffs. Similarly, there should be electronic communication between taxpayers and tax departments. These proposals can make noticeable difference and win the confidence of taxpayers. He said that government must ensure that concerned Chinese investors and companies engaged in CPEC must consider the indigenously produced inputs from Pakistan except those goods which are not produced locally. He said that the goods which are not manufactured / produced in Pakistan, for example, Soybean meal and Grandparents Chicks should not be taxed.
Abdul Basit said section 38-B of Sales Tax Act, 1990 is being adversely used by the officials of tax department. They are paying illegal visits to markets and godowns to unjustifiably harass the business people. He suggested that teams from tax department should visit the markets, if indispensable, but they should be bound to follow due legal process and immediately stop harassing business community.
“Bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of Commissioner in the light of reply submitted by the taxpayer. The recovery should be after the decision of the Tribunal and not before that. Finances of business people in their bank accounts help sustain their business while when they are withdrawn by the department, it tantamounts to sudden business death”, the LCCI President added and further said that alternative Dispute Resolution Mechanism has to be strengthened and FBR must accept its recommendations.
The LCCI President further suggested that meetings for the determination of Customs Values should be held at Lahore as well to enable the stakeholders of Punjab conveniently attend said meetings to provide their input. He said also proposed that instead of bringing changes in Customs Values, duty / tax rates should be rationalized which would certainly be more effective to increase government revenue. He said that the exporters are suffering the most because they are facing serious issues of shortage of working capital. All the backlog of refunds should be cleared within two months upon the filing of return. FBR must pay markup at bank rate to the person whose refunds are stuck up by the department so that same may be paid to the bank against borrowings.
The LCCI Vice President Muhammad Nasir Hameed Khan said that the government should take steps to control smuggling at the borders and Frontier core deployed there should be equipped with state of the art technology and made them more vigilant and to advise them to play their role in controlling the smuggling by exercising their authority under customs Act. He said that one of the major reasons of smuggling has been Afghan transit trade. Afghanistan should not be allowed to import such raw materials which are not being used there due to inexistence of such industry in Afghanistan. He suggested that the duties on such goods which are prone to smuggling should be reduced as it has been practiced successfully in many other countries.
