Lahore Chamber of Commerce and Industry (LCCI) President Sheikh Muhammad Arshad has said that it would be hard for the economy to grow in the presence of major issues like double taxation and undue delay in refund claims, and therefore the government should resolve the issues as soon as possible.
He was talking to a delegation of traders from Liberty and other major markets led by Irfan Iqbal Sheikh at the Lahore Chamber of Commerce and Industry on Tuesday. LCCI Vice President Nasir Saeed also spoke on the occasion.
Traders who attended the meeting included Yousaf Khan, Hafiz Ameer Ali Awan, Umer Chaudhry, Mian Zahid Javed, Nasir Mahmood, Mian Muhammad Farid, Ghulam Mustafa, Abdul Majeed, Aas Muhammad, Ihsan Anjum, Tariq Mahboob, Kamran Saleem, Sohail Sarfraz Munj, Dr. Masood Alam, Ismail Khan, Ahsen Mahmood, Muhammad Anwar Bajwa, Asim Bashir, Roy Zafar, Rana Bashir Ahmed, Mukhtar Ali, Javed Iqbal Siddiqui, Zahid Maqsood Butt, Asim Javaid, Masood Nizami, Imran Iqbal, Farhat Majeed Adil, Rasheed Roy, Rizwan Shamsi and Rehmatullah Javed.
LCCI President Sheikh Muhammad Arshad urged the Federal Board of Revenue (FBR) to pay attention towards the double taxation which has become a major hurdle in the running of smooth businesses. He said that after 18th Amendment, provinces have developed their own legislations and rules for the administration of sales tax on services.
It is argued in the light of various international studies that the ideal sales tax system is perhaps a uniform national one where the distinction between commodity (goods) and services is artificially eliminated and the system is made uniform and seamlessly applicable on both goods and services across the country, he said.
He said that as this ideal appears to be a non-practical venture in Pakistan where provinces are determined to manage the collection of sales tax on services at their own level with constitutional backing. He said that keeping in view this fact; a uniform system can be worked out by the FBR and provincial authorities collaborating to streamline the tax treatments and rates to ensure a more uniform atmosphere for the businesses which will in turn result in an increased GDP.
The major issues faced by the taxpayers at present due to non-collaboration between various taxation bodies (FBR, PRA, SRB, etc.) are jurisdiction disputes, double taxation between provinces, non-uniformity of provincial laws, structural issues in the provincial revenue collection bodies, and overall lack of collaboration and harmonisation
The LCCI president suggested that in order to facilitate the taxpayers, the business environment and thereby the provincial economies, there should be harmonisation and collaboration between the provincial revenue collection bodies (PRCB) and with the FBR, standardisation of general tax treatments in the jurisdictions of various PRCB and FBR, standardisation of sales tax rates across industries and sectors In the jurisdictions of various PRCB and FBR, resolving structural issues and capacity building at PRCB and FBR.
Sheikh Muhammad Arshad urged the Federal Board of Revenue (FBR) to expedite stuck-up sales tax and income refund claims as the issue has caused shortage of capital to the industry.
He said that the FBR is hampering the growth of the most productive sectors by denying the exporters and manufacturers their right to refund sales and income tax.
The LCCI chief said that the delay in release of huge funds that runs into billions has triggered serious liquidity crunch for the exporters and manufacturers that might lead to closure of several industrial units.
He said that the process to get refunds is lengthy and cumbersome and that it sometimes takes months for a manufacturer or an exporter to get his own money refunded. He said that the businessmen were bearing huge financial cost on their own hard-earned money; therefore, the FBR chairman should look into the matter and ensure early release of sales tax and income tax refunds.
