Syed Shabbar Zaidi, Chairman of the Federal Board of Revenue (FBR), addressed the media on Friday, affirming the government’s commitment to expanding the tax base while ensuring that no sector of the economy is unduly burdened.
Zaidi clarified that the government has refrained from imposing taxes on essential kitchen items such as flour and ghee. He emphasized the FBR’s dedication to broadening the tax base without compromising the vitality of the country’s industries or trade. “We will not take any decision that hurts our industry or trade,” he stated during the press conference.
The Chairman acknowledged the need to increase the tax-to-GDP ratio, which is currently relatively low. Zaidi highlighted the extensive negotiations conducted with businessmen and traders to address their concerns, asserting that there is no deadlock in discussions with trade associations. He assured that the FBR is open to considering suggestions from traders while finalizing policies affecting them.
Expressing satisfaction with the development of the textile sector, Zaidi pledged government support and mentioned the potential implementation of a fixed tax scheme for small retailers. He assured that decisions would be made in consultation with stakeholders and would not be counterproductive for the textile industry.
The FBR has been actively engaged in negotiations with the business community throughout the country, focusing on two key issues: Special Revenue Order (SRO) 1125, related to zero-rating, and the requirement of the Computerized National Identity Card (CNIC) for sales tax.
SRO 1125 governs the zero-rating tax regime, allowing exporters to pay zero tax but claim refunds on specific items. The CNIC condition, a sales tax law, mandates traders to produce their CNICs for transactions exceeding Rs50,000 to be registered with the FBR and brought into the tax net.
Despite facing resistance from traders on the CNIC condition, Zaidi emphasized that it is part of a broader campaign against tax evasion. He clarified that this condition wouldn’t impact the general public but is vital for bringing more traders into the tax net.
Highlighting the FBR’s goal to automate the tax system and reduce human interference, Zaidi underscored the importance of this strategy for successful reforms. He also addressed concerns raised by duty-free mobile importers, stating that the government aims to curb under-invoicing to document the country’s economy.
In conclusion, Chairman Zaidi reiterated the government’s dedication to fair and balanced taxation measures, underscoring the collaborative approach taken with various sectors to achieve the goal of expanding the tax base without negatively impacting economic sectors.
