Islamabad Chamber of Commerce & Industry (ICCI) President Mahfooz Elahi has said that unprecedented tax targets set by the government in the federal budget could be the main cause of fiscal imbalances end of financial year.
In a statement issued here on Saturday, he said that the government has continued to rely on unachievable economic figures and has emphasized on tax collection without setting growth targets in any sector stated this in a statement. He said that apparently revenue target seems to be totally unachievable. In the current scenario, the government may be much behind Rs. 1952 billion set target, he estimated.
The ICCI president feared that harassment by tax departments would increase to achieve this huge revenue target and tax machinery would be under extreme pressure to get revenue targets, announced in the Federal Budget 2011-12. He added that tax collectors should collect taxes without any harassment, and that the government must develop a conducive environment to collect taxes and also to encourage non taxpayers to come into the tax net.
He said that the direct tax collections envisaged in the budget 2010-11 could not be realized. He was of the view that in case of lagging behind the expected tax target, the government would be facing huge problems because of the further increase in the fiscal deficit, which has already widened and is pulling country into a debt trap.
There should be a free and fair taxation policy in order to raise revenues; broadening and simplifying the tax collection procedures is the need of the day and the government must develop an environment of trust to build the confidence of tax payers, Elahi emphasized.
He anticipated that the country has the potential of increasing tax to GDP ratio through making the system public friendly and equitable. He further said that widening the tax net is very much required but it must be in a systematic and realistic way. He emphasized on winning the public confidence by improving governance, eradicating corruption and pursuing equitable tax policies.
