KARACHI: Dr. Muhammad Ashfaq Ahmed, chairman, Federal Board of Revenue (FBR) on Tuesday said reduction in income tax slabs may be considered.
Addressing the business community at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that existing income tax slabs were implemented after due consideration.
Earlier, the business community pointed out high number of tax slabs in the Income Tax Ordinance, 2001.
READ MORE: Withholding tax should be on income: FBR Chairman
Commenting on requirement of Computerized National Identity Card (CNIC) on transactions, he said this condition was introduced three years ago. The FBR has gathered bulk of information due to this condition. Further, many cases of using fake CNICs for making transactions were also reported, he added.
The FBR chairman said that retailers had positively responded to integration of Point of Sales (POS) in Karachi. “Many issues will be resolved with improvement in supply chain,” he added.
The business community raised the issues of audit notices. Dr. Ashfaq said that action would be taken if audit notices were not responded. “The audit notices should be responded with documentary evidence,” he said.
READ MORE: UAE favorite hiding for Pakistan assets: Dr. Ashfaq
About the tax laws, he said that foreign companies investment in Pakistan are unaware about our domestic laws, he said and assured that the FBR would facilitate both local and foreign investors to understand tax laws.
Earlier, Anjum Nisar, Chairman, Businessmen Panel (BMP) said that delay in tax refunds create liquidity issues for industries. He said if taxpayers delays in compliance then he is subject to penalty and surcharges. Similarly, this should be apply to tax officials, he added.
Irfan Iqbal Sheikh, President FPCCI, put forward the concerns and complaints of the business, industry and trade community of Pakistan to the Federal Board of Revenue during the detailed visit of its Chairman, Dr. Ashfaq Ahmed; along with the top brass of FBR.
READ MORE: FBR explains cash discount under sales tax laws
FPCCI President said that excessive and unsubstantiated tax notices; maladministration and corrupt elements; requirement of buyers’ CNIC copy; huge backlog of refund cases; double taxation; misuse of erstwhile FATA & PATA exemptions; higher rates of corporate, sales and withholding taxes; mandatory POS integration with FBR; multiplicity of income tax slabs and SRO culture are the major impediments in reforming the taxation system and broadening of the tax base.
Irfan Iqbal Sheikh added that 29 percent corporate tax and 17 percent sales tax are too high for economic growth, industrialization and employment generation; and, rates of these taxes should be gradually and progressively brought down. He elaborated that no country of the world has ever progressed in the absence of industrialization; while commending the recently announced industrial growth package of the federal government.
READ MORE: FBR amends fresh property valuations for Islamabad
Engr. M.A. Jabbar, VP FPCCI, emphasized that we have to do away with the notice manufacturing practices of the taxation machinery as that prohibits the new taxpayers to register themselves into the system to avoid unnecessary regulatory interferences.
Dr. Ashfaq Ahmed, Chairman FBR, expressed his willingness to have policy deliberations over FPCCI’s demand of reducing audit period to three years from the current six years. He also apprised the session that FBR has performed exceedingly well despite the debilitating economic conditions arising out of COVID-19 pandemic and have collected record taxes. He also expressed his optimism that FBR can soon achieve a Tax-to-GDP ratio of 12 per cent.
