Karachi Chamber Of Commerce and Industry (KCCI), has demanded to withdraw the unnecessary amendments made in Sales Tax, Federal Excise and Income Tax Return Filing via recently introduced return filing system and the relevant form. In a letter to the Chairman Federal Board of Revenue, President Mian Abrar Ahmad president KCCI has urged that Business and Industrial Community cannot accept the Amended Return in its present form and consequently the tax payers are unable to comply. The KCCI demands all such amendments be withdrawn with immediate effect or otherwise Karachi Chamber be contacted for immediate consultation to resolve this issue. President KCCI has voiced that the Business & Industrial Community can not move forward in this form. Therefore, it is in the interest of the Business & Industrial Community and Government Exchequer to settle this issue as soon as possible.
He has stated that numerous complaints were received from members’ newly issued Income Tax, Sales Tax & Federal Excise Returns and this is very unfortunate that major changes have been made without consultation with the leadership of the business and industrial community. This has made it practically impossible to file the tax returns and will only result in the reduction of tax revenue and would force genuine tax payer’s to operate outside the tax net.
President KCCI has pointed out some major changes that have been brought into the tax returns and need to be eliminated:- For Sales Tax Returns, the FBR has made submission of CNIC and NTN mandatory for all purchases made by any registered person. Reporting of complete details of every purchase, Debit Note & Credit Note is practically not possible when one has to segregate on the basis of rate, H.S. Code and other parameters defined in the Note of Annex-A. The column of ‘Input Credit Not Allowed’ is ambiguous.
The Annexure H (stock statement) of new form requires complicated calculations and maintenance of various ledgers for the different types of products & items. This cannot be maintained by the small business being run by uneducated entrepreneurs. The amount of work required to submit this information will not allow the tax payer to efficiently run the business. The business community is striving to meet the ends and cannot act as an unpaid accountant for the FBR. This form should be withdrawn.
In sales tax return annexure “F” has been incorporated where details of carried forward input tax in relation to closing stock on monthly basis with effect from 01-07-2011 has to be provided. This form requires complicated calculation and maintenance of various ledgers for the different types of Inputs on Domestic Purchases, Imports & Value Addition Tax. This exercise is cumbersome and requires additional manpower.
Under the Income Tax Return, Annexure “D” has been incorporated requiring businessmen to furnish details of expenses incurred, including education, spouse, self travelling, telephone and mobile bills, internet and so on. This is against the spirit of self assessment, where genuine tax payer’s come forward voluntarily and submit their claim, unfortunately through arm twisting and increasing the work load of industries and traders, will only have negative impact on the business climate which is already suffering. Besides it is next to impossible, to handle such a complicated exercise. Businessmen are paying substantial taxes on an advance stage simply to avoid underhand dealing and to operate with peace of mind, and least possible documentation. Similarly related to income tax return is the calculation of flood surcharge, where the payers are expected to calculate 15% surcharge to be exact on 108 days of their annual income which is complicated, unproductive and simply a hassle.
Mian urged that FBR should stop creating such resistance and opening avenues for corruption and should involve its own tax machinery to increase the tax net and leave the Business Community alone to concentrate on its business, and enhance income and as a result the tax revenue.