The Pakistan Business Council (PBC) has recommended the government to tax all the income irrespective of sources to boost revenues and create fiscal space for implementing socio-economic development.
In its budget proposals submitted to Finance Minister Senator Ishaq Dar for the fiscal year 2016-17, the representative body (PBC) of about 50 largest private-sector businesses said that the government could not create fiscal space for implementing its ambitious socio-economic agenda just by increasing taxes on the already taxed sectors of the economy.
The body welcomed the efforts of the finance minister for increasing the taxpayer base. It also supported the distinction introduced between filers and non-filers of tax returns, however, it emphasised that much more needed to be done.
The PBC recommended the FBR tap into its database for individuals and companies whose income and sales tax withholding had been done by withholding agents and who, as per the law, have uploaded this data on the FBR’s servers. The PBC has also called for doing away with the presumptive tax regime and in the interim period to treat presumptive tax as a minimum tax.
The PBC demanded that taxpayers should not be subject to repeated audits and that trust needed to be developed between the taxpayers and the tax department. The PBC’s has proposed that the real estate sector be brought in the tax net and conditions be created to forcefully unlock the huge potential of this sector to allow it to contribute to the exchequer. The plight of the withholding tax agents has also been highlighted with the request that some compensation be provided to the withholding tax agents who have been converted into the tax collection arm of the FBR.
The PBC noted with concern the steady deterioration in competitiveness of Pakistan’s manufacturing sector and especially pointed out the loss of domestic markets for Pakistani companies. The PBC has suggested a moratorium on the signing of new trade agreements and a review of the existing ones with the aim to rectifying the shortcomings.
Smuggling, massive under-invoicing and misuse of the Afghan Transit Trade have also been identified as major causes of the erosion of competitiveness of domestic manufacturing.
