Economic and business experts, at a seminar, stressed the need for consistency in taxation policies, besides broadening the tax-base, cutting expenditures and reducing the fiscal deficit. They were speaking at a pre-budget seminar titled `Encouraging Enterprise-The Growth of Business’, organised by the Association of Chartered Certified Accountants (ACCA) Pakistan with an aim to contribute its research and insight towards healthy fiscal measures in the country.
Speaking on the occasion, Federal Board of Revenue Inland Revenues Member Khawar Khurshid Butt said that the board has opted for comprehensive measures to bring thousands of potential non-filers into the tax net. He stated that the board has spent about Rs 6.0 billion on tax reforms, adding that it was still working hard to move towards solving problems to enhance tax generation. Butt said that the FBR could facilitate provinces in collection of agriculture income tax; however, the decision to this effect could be taken by the parliament.
To a question, he said that the board receives taxation proposals from all across the country which are sifted and forwarded to Revenue Advisory Council. Following short listing, these are forwarded to the Finance Ministry for consideration. Speaking on the occasion, Islamabad Chamber of Commerce and Industry President Mehfooz Elahi highlighted the importance of bringing consistency in the taxation policies. “Let’s be consistent in our policies,” he remarked and expressed hope that the upcoming budget would be people friendly. Nust Business School Dean Dr Ashfaq Hassan Khan, in his detailed address, suggested the government to keep the fiscal deficit below four percent of the GDP in the upcoming fiscal year.
He advised the FBR to fix revenue collection target at Rs 1765 billion to Rs 1775 billion, as the board has failed in achieving targets set for past year. He said that the government should inform and educate people that reformed General Sales Tax (GST) would not be inflationary, adding that provinces should also reform their tax system to enhance overall tax generation. He believed that the government should sell off all state owned entities, running in loss to save about Rs 300 billion. He further highlighted the importance of overcoming circular debt issue and electricity losses.
Earlier, in her detailed presentation ACCA Pakistan Vice Chairperson Members Network Panel Dr Ayla Majid said that the government should enhance overall tax to GDP ratio; however, she added that tax on corporate sector was high and should be reduced. She emphasised on the need to focus on trade and investment, besides encouraging enterprise and regional competitiveness to help economic development.
She believed that the government should increase tax exemption from the annual income of Rs 300,000 to Rs 500,000, keeping in view the average inflation – which was 10 percent last year and 13 percent this year. She drew attention at the importance of rationalising the withholding tax on common imports by industries and cash withdrawals. She stated that the General Sales Tax should be reduced to 15 percent and favoured zero rating of plant, machinery and raw material for industries.
She pointed at the need of a clear and comprehensive three years implementation plan for a revised taxation regime. Ayla further stressed on the importance of broadening the tax net, adding that provincial laws pertaining to agriculture income tax should be implemented in letter and spirit.
