The Federal Board of Revenue (FBR) should withdraw the multiple rates of sales tax and apply a uniform rate of nine percent for all products, said President FPCCI Fazal Kadir Khan Sherani Friday. He was addressing a pre-budget seminar jointly organized by the Karachi Branch Council (KBC) of Institute of Cost and Management Accountants of Pakistan (ICMAP) and Federation of Pakistan Chambers of Commerce and Industry (FPCCI) here at the Federation House. Sherani said this would not decrease the revenue of the government, as smuggling will die down and all the quantities will be imported through the legal channel, thereby reducing the size of the parallel economy.
He proposed that under section 3(3)(a), a supplier is supposed to collect and deposit tax, whereas after introduction of Section 8 A, joint and several tax liability was placed for both buyer and seller for non-payment of output tax by the seller. This not only clashes with section-3(3) (a), but is also against the principles of natural justice. At present, the Department of Inland Revenue is issuing notices to commercial importers for doubtful/illegal refunds obtained by manufacturers, while investigating the cases of refund claimants, whereas, commercial importers discharge their liability by paying Sales Tax and Value Addition Tax at the import stage and therefore, they should not be held responsible for this matter. He informed the audience that FBR was seriously considering a budget proposal to reduce federal excise duty on cement from fiscal (2012-13) under the government’s commitment to totally abolish excise duty on the commodity in phases. Asif Kasbati, Director Tax Services, A F Ferguson and Co, spoke on proposals for income tax and emphasized that corporate income tax rate should gradually be brought down to 25 percent and 30 percent for listed and unlisted companies respectively as 35 percent rate is very high viz-a-viz 25 percent tax date on other business houses. He vehemently opposed to Final Tax Regime for corporate sector. He suggested to allow set-off of prior years’ losses in order to promote Group Taxation and Amalgamation. As certain sectors have already allowed to be taxed at Minimum tax rate of 0.5 percent, he suggested that the rate should be restored for all the taxpayers. He recommended that powers to set-aside be given to Commissioner Appeal and automatic stay of demand be allowed on payment of 15 percent and 50 percent respectively at Commissioner and Appellate Tribunal stages. Kasbati also proposed that the basic exemption limit be enhanced to Rs 450,000 owing to high inflation rate. To promote capital market, he recommended that tax credit for investment in shares be increased from Rs 500,000 to Rs 700,000 and retention period be restored to one year. Adnan Mufti of Sheikha Mufti and Co., told the audience that in the last Budget, the Finance Minister announced on the floor of the House that Excise Duty Regime is being condensed and would entirely be withdrawn in next 2 years. Despite such a categorical announcement, we saw ‘Sugar’ was placed under the Excise Law and sales tax was withdrawn there from. He said that Financial Press has reported that the current year’s budget will see many other items would be brought under the Excise Laws. Revenue pressures override policy decisions. He said that Industrial notes might be drawn by FBR in consultation with ICAP, & ICMAP for significant sectors and standard ratios of wastage occurring during such processes.
2012-13 budget will be tax-free: FBR chairman
ISLAMABAD: Chairman Federal Board of Revenue (FBR) Mumtaz Haider Rizvi announced that next budget would be a tax-free. He was addressing the Association of Chartered Certified Accountants (ACCA) Budget Seminar on a question that how it would be possible for FBR to achieve target of Rs 2,338 billion for the next fiscal year without laving any new taxes, he said that FBR is working on broadening of new tax base through which without implementing any new taxes new tax payers will be identified and taken into the tax net. He said that Cement industry for the last four years not have not payed a single penny in shape of tax from its own pocket except to putting forward it on the consumer. He said that oil companies, Sugar and textile companies were also not paying due taxes. The FBR Chairman said that the there is a cleansing process is going on in FBR in which leakages and flaws will be removed from the tax system. He said that from this year, come what may transparent tax policy would be followed under which culture of Statuary Regulatory Orders (SRO) will be removed and slabs will be cut down in-order to encourage the tax payer to pay tax. He said that FBR is on target towards achieving Rs 1952 billion target and till now in the first nine months FBR has collected Rs.1266.039 billion revenues during July-March (2011-12) surged by 24.1 percent. He said that out of total FBR leakages, 79 percent is from income tax out of which 65 percent were from the corporate sector that avoids paying its income tax. He said that FBR is trying to change the tax culture in the country. Abdulla Yousaf, Chairman Independent Power Producers Advisory Council said that Pakistan can only get out of its debt through improvement into its tax system. He said that Integrated Tax management System is a step towards the independent and transparent tax system. He said that the government have to rely more on systemization of its tax system in which third party information from different systems will be collected into one place. The ICCI President Yassar Sakhi Butt, ACCA Pakistan President Arif Masud and Noor Aftab have also given their observation in the
Budget Seminar. ONLINE
