ISLAMABAD: Federal Board of Revenue (FBR) Chairman Muhammad Ashfaq Ahmed has said that reduction in income tax slabs may be considered.
Addressing the business community at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) he said that existing income tax slabs were implemented after due consideration.
According to a statement issued by FPCCI, Irfan Iqbal Sheikh, President FPCCI, put forward the concerns and complaints of the business, industry and trade community of Pakistan to the FBR during the detailed visit of its Chairman, Dr. Ashfaq Ahmed; along with the top brass of FBR.
FPCCI President said that excessive & unsubstantiated tax notices; maladministration & corrupt elements; requirement of buyers’ NIC copy; huge backlog of refund cases; double taxation; misuse of erstwhile FATA & PATA exemptions; higher rates of corporate, sales and withholding taxes; mandatory POS integration with FBR; multiplicity of income tax slabs and SRO culture are the major impediments in reforming the taxation system and broadening of the tax base.
Irfan Iqbal Sheikh added that 29 percent corporate tax and 17 percent sales tax are too high for economic growth, industrialization and employment generation; and, rates of these taxes should be gradually and progressively brought down. He elaborated that no country of the world has ever progressed in the absence of industrialization; while commending the recently announced industrial growth package of the federal government.
While commenting on the requirement of a Computerized National Identity Card (CNIC) on transactions, the Chairman FBR said this condition was introduced three years ago. The FBR has gathered a lot of information due to this condition. Further, many cases of using fake CNICs for making transactions were also reported, he added.
The FBR chairman said that retailers had positively responded to integration of Point of Sales (POS) in Karachi. “Many issues will be resolved with improvement in the supply chain,” he added.
As the business community raised the issues of audit notices, Dr. Ashfaq said that action would be taken if audit notices were not responded to. “The audit notices should be responded with documentary evidence,” he said.
About the tax laws, he said that foreign companies investing in Pakistan are unaware about our domestic laws, he said and assured that the FBR would facilitate both local and foreign investors to understand tax laws.
Chairman FBR, expressed his willingness to have policy deliberations over FPCCI’s demand of reducing the audit period to three years from the current six years. He also apprised the session that FBR has performed exceedingly well despite the debilitating economic conditions arising out of Covid-19 pandemic and have collected record taxes. He also expressed his optimism that FBR can soon achieve a Tax-to-GDP ratio of 12 per cent.
Earlier, Anjum Nisar, Chairman, Businessmen Panel (BMP) said that delay in tax refunds create liquidity issues for industries. He said if taxpayers delay in compliance then he is subject to penalty and surcharges. Similarly, this should apply to tax officials, he added.
