The Islamabad Chamber of Commerce and Industry (ICCI) organised the pre-budget seminar 2011-2012. The purpose of this seminar was to assess the pre-budget situation and suggest remedies for the current challenges faced by the economy. A major chunk of our budget is spent on debt financing, defense and running of public sector enterprises; thus placing a massive burden on country’s fiscal framework.
There is a need to curtail loss on expenditures, former FBR Chairman Abdullah Yousaf said, while he addressed the business community at ICCI. He said that Pakistan has unequal distribution of taxes due to policy failure or inability of system to collect taxes levied. He said that tax gap is a difference between taxes levied and taxes actually collected, adding that we collect only 50 percent of the total tax levied. He said that FBR was the main institution to collect taxes; however, there is a need to increase capability through automation and electronic filing.
Former FBR Chairman believed that transparency in the taxation system could help to plug loopholes. He suggested that the Data Warehouse is the most important tool for broadening the tax-base. He emphasised that potential taxpayers should file their returns to gear up the economic growth. He stressed on the need to seriously resolve energy crises, and hence, ensure growth. He further said that good corporate governess and effective monitoring system have to be practiced for smooth running of Public Sector Enterprises. The criteria should be that ‘income of the individual should be taxed and not the wealth’, he maintained.
Speaking on the occasion, Mahfooz Elahi, President ICCI said that government has to take business community on board in the budget-making process. He said that wealth tax should not be imposed as its imposition would encourage capital flight from the country. He pointed at that trust deficit between taxpayers and the tax department officials and urged that it must be removed for widening the tax base. The tax system must be simple and consistent; while it must not be revamped each time a new government comes in, adding that tax collectors should collect taxes without any harassment.
The ICCI president said that imposition of reformed GST would put a negative impact on business activities, levying of any new tax would create multiple problems for the business community and common man. He urged the government to control price hike and to give relief to common people in upcoming budget.
