ISLAMABAD: Pakistan People’s Party (PPP) Senator Islamuddin Shaikh, an active member of the Senate Standing Committee on Finance and Revenue, Commerce and Textile Industry, has urged the Federal Board of Revenue (FBR) to lower the rat of taxes and duties to further broaden the tax net by persuading more and more people for submission of tax returns.
In an interview with Customs Today Islamuddin Shaikh said that in the wake of higher tax and duties rates, the people are more inclined to tax evasion in connivance with officials concerned as well as through litigation procedures.
Moreover, people voluntarily tend toward payment of taxes and duties in those countries where rates of taxes are minimal. If the FBR lowers taxes and duties’, the tune of tax and revenue collection can be increased by several times.
In this regard, he suggested the FBR should finalize tax and duties’ related proposals to finance ministry for upcoming budget in consultation with all the stakeholders, especially exports’ related sectors.
Therefore, FBR may also launch a new tax amnesty scheme or re-launch voluntary tax compliance scheme (VTCS) after introducing some amendments so that more people may be brought in the tax net. Actually, people want to pay taxes but higher taxes and duties’ rates frighten them of tax net therefore they try to find out a middle way to avoid taxes.
He also proposed the finance ministry to finalize budgetary proposal for the benefit of common people. There must be no tax on products of daily use of people to check increase in the prices of daily commodities as well as to check price hike soon after the passage of budget.
He added that agricultural sector’s export related products should be tax and duty free as well as government should provide subsidies on agricultural export items like India, US and several other countries.
Number of countries provides subsidies to the exports and agricultural products in a bid to provide a level playing field for local growers to compete in the international market. Subsidies reduce the cost of production of the growers therefore exporters are enabled to compete in the international markets for the yields.
Shaikh said that world had shrunk into the global economic village and Pakistan could not move forward without relaxing economic restrictions. The government must relax the economy from unnecessary barriers to attract foreign investment as well as to add new tax payers in the tax net.
He said that the previous government carried out an exercise and identified over three million new tax payers, but the sitting government could not get yields of that exercise. The sitting government instead of following set precedent of our government tended to overburden the existing tax payers by levying additional taxes.
Shaikh said that attitude of bureaucracy and field officers of tax organization towards businessmen and investor community needed to be changed to promote harmonized environment in the country.
Flight of capital, he said that was the burning economic issue of the country and government should focus on bringing foreign investment to enhance business activities in Pakistan.
Unfortunately, security and law and order situation resulted in flight of capital from Pakistan during last ten years and now the government must come up with long and short term policies to not only bring the flown capital back as well as foreign investors to Pakistan.
To a question about postponement of visit of China Pak Economic Corridor (CPEC) Senator Shaikh said that delayed execution of CPEC related projects by Pakistani and Chinese officials had resulted in loss to Pakistani economy and image abroad. China is a lone well-wisher of Pakistan not only in the South Asia but in the world too.
