KTBA presents proposals for budget 2021/2022

KTBA presents proposals for budget 2021/2022

KARACHI: Karachi Tax Bar Association (KTBA) on Tuesday presented proposals for budget 2021/2022 to the Federal Board of Revenue (FBR).

In its proposals the KTBA said that the tax-to-GDP ratio was a soaring issue for country’s economic managers. “On the other hand, tax measures undertaken in Pakistan have traditionally created higher taxation on formal economy and under taxation on information economy,” it added.

Primarily, it is because of over dependence over withholding tax regime as well as due to higher tax expenditure and concessions/exemptions.

In addition to above many studies have concluded that there are gap in agriculture and property income in Pakistan which otherwise are under-taxed hence misused.

“Besides, there are distortions in collection of General Sales Tax on goods and services and full tax collection on this core is yet to be exploited,” it added.

In addition to above, a host of tax exemption/concessions have already been withdrawn by way of Tax Laws (Second) Amendment Ordinance, 2021 which was believe will become part of budget proposals.

It is however the country needs a lot more drastic measures to bring its tax to GDP ratio at desired level.

The KTBA suggested that federal and provincial governments should harmonize their differences in order to remove the gaps and distortions and to improve tax collection from agricultural, property and GST.

The tax bar said that the proposals were completed keeping in view following features and categories:

— Salvaging the manufacturing sector

— Proposal for salvaging the corporate sector

— Taxation and withholding tax regime under Section 148 and 153 of Income Tax Ordinance, 2001.

— Proposals regarding taxation of property income

— Capital gains taxation on securities

— Proposal for changes in taxation of salary income

— Proposal for changes in taxation of non-residents

— Proposal for change in Non-Profit Organizations

— Withholding tax provisions

— Proposal for Appellate proceeding

— Proposal for departmental proceeding

— Proposal for simplifying filing and other periodic compliance

— Broadening the scope and equitable of the law.