(PkRevenue.com) – The federal government assured the Karachi Chamber of Commerce and Industry (KCCI) on Monday that it would seriously consider their proposals for the 2024-25 budget.
Minister of State for Finance & Revenue Ali Pervez Malik and Chairman Federal Board of Revenue (FBR) Malik Amjed Zubair Tiwana, along with the FBR team, engaged in an interactive discussion with the KCCI, committing to implement proposals aimed at fostering a conducive business environment and supporting growth.
During an online meeting via Zoom, the Minister assured that KCCI’s recommendations would be forwarded to higher authorities for inclusion in the budget, despite the current fiscal constraints. The meeting saw participation from President KCCI Iftikhar Ahmed Sheikh, Senior Vice President Altaf A. Ghaffar, Vice President Tanveer Ahmed Barry, and Chairman Special Committee for Budget Proposals Muhammad Ibrahim Kasumbi, along with FBR officials including Member (Customs-Policy) Suraiya Ahmed Butt, Member (Inland Revenue-Policy) Amna Faiz Bhatti, and Member (Inland Revenue-Operations) Mir Badshah Khan Wazir.
President KCCI Iftikhar Ahmed Sheikh expressed optimism that the budget would incorporate measures proposed by various Chambers of Commerce aimed at stimulating economic growth through industrialization and support to the SME sector. He emphasized addressing long-standing issues faced by the business and industrial community, such as high taxation rates, exorbitantly high energy tariffs, and excessive customs duties and sales tax on imported raw materials and essential products.
Chairman KCCI’s Special Committee for Budget Proposals Muhammad Ibrahim Kasumbi presented the budget proposals, highlighting concerns over tax rate disparities on raw materials, leading to revenue leakages. He advocated for the elimination of disparities in sales tax and withholding tax rates, and rationalization of further taxes to curb malpractices and revenue losses.
Kasumbi also recommended discontinuing tax exemptions granted to Azad Kashmir, FATA, and PATA regions by the end of the current fiscal year to create a level playing field and mitigate revenue losses. He noted that black tea imported under these concessions was being sold across Pakistan, resulting in significant losses to importers and the economy.
Further, he pointed out that disparities in tax rates on raw materials like polymers, polyester yarn, iron & steel, and edible oil were leading to misuse of concessional rates. He suggested reducing the further tax rate to 1.0 percent for sales to unregistered entities to discourage evasion and eliminate fake invoices, ensuring full sales tax revenue recovery for the FBR.
Kasumbi proposed withdrawing the minimum turnover tax rate to ease companies’ tax burdens and ensure operational sustainability. He argued that the FBR should develop the capability to assess profits rather than relying on presumptive taxes. He also termed the Super Tax as an additional burden, suggesting it be implemented selectively on high-profit sectors such as banking, insurance, financial services, and energy, rather than across all companies.
He raised concerns over Section 7E of the Income Tax Ordinance (ITO), which has severely impacted the real estate and construction sectors. Kasumbi called for the withdrawal of provisions related to deemed income and tax on undeveloped land transactions to release funds stuck in real estate and improve liquidity for trade and industry.
Senior Vice President KCCI Altaf Ghaffar emphasized the need for the budget to focus on economic reforms and provide a clear growth roadmap rather than solely revenue generation measures. He thanked the State Minister and FBR team for the productive discussions, expressing hope that KCCI’s proposals would be accommodated in the forthcoming budget.
