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  • KCCI supports government resolve to tax all taxable incomes

    KCCI supports government resolve to tax all taxable incomes

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has supported efforts of the government to bring all taxable income into tax net.

    In a statement issued on Monday President KCCI Junaid Esmail Makda said that Karachi Chamber never supported any strikes and will continue to do so in future as well because strikes were neither in favor of the business community nor in favor of the government therefore, they strongly believe in negotiations which was also suggested by Chairman BMG during the abovementioned meeting with PM Imran Khan.

    He opined that the government has set an ambitious revenue collection target and we hope that the government could come close to achieving it as the country is in dire need of it.

    Junaid Makda stated that the government rightly emphasizes on strictly dealing with tax evaders particularly those who have been living lavish lives, frequently travelling abroad, having huge properties and extravagant vehicles while their kids were also studying in foreign universities but during this course of action no injustice be done to any innocent.

    “Our Prime Minister, State Minister, PM’s Advisor, Chairman FBR and other lawmakers have been claiming of possessing details of all such tax evaders and assuring to take strict action but I would like to suggest that the names of such elements who are the actual culprits must be publicized in the media. It is genuinely because of such elements that the loyal taxpayers have to bear the burden of exorbitant taxes which is a sheer injustice and needs special attention,” he added.

    While appreciating PM’s remarks pertaining to partnering with the business community in order to resolve issues and ensuring Ease of Doing Business which is the need of the hour, Junaid Makda requested a flexible approach while dealing with loyal taxpayers who hardly receive just 5 percent of facilities as compared to their contribution to the national exchequer.

    He further pointed out that hundreds of imported containers remain stuck up at the port either due to anomalies or any other issues emerging after the amendments. Although the Chairman FBR Shabbar Zaidi has assured to look into this matter but the business community would highly appreciate a more rapid approach with permanent solution to this issue in order to save businessmen from suffering serious losses on account of demurrage and detention charges.

    Chairman Businessmen Group (BMG) & Former President KCCI Siraj Kassam Teli and President Karachi Chamber of Commerce & Industry (KCCI) Junaid Esmail Makda, welcomed the assurance given by Prime Minister Imran Khan during his last meeting with Karachi’s business community, stated that the Karachi Chamber fully supports the government’s resolve to bring everyone into the tax net as higher number of taxpayers would result in dividing the tax burden and ultimately ensure relief to existing taxpayers who are currently overburdened with exorbitant taxes and duties.

    Chairman BMG and President KCCI categorically stated that Karachi Chamber’s membership base comprises of taxpayers only who all have valid NTN numbers. “KCCI firmly believes that everyone should pay taxes and it was a matter of pride for us that we represent a city that contributes a mammoth amount of more than 70 percent revenue to the national exchequer in shape of taxes, duties and other levies”, they said, adding that everyone should be taxed and no tax exemptions should be granted to favorites as it is the prime responsibility of every citizen to contribute towards the progress and prosperity of Pakistan by paying all the applicable taxes.

    The KCCI leadership further urged the FBR to post the city-wise taxation details and relevant statistical data on its website so that actual position could be brought into the limelight and other cities, which were contributing less taxes, must also be taken to task.

    Chairman BMG Siraj Kassam Teli commented that the government has devised numerous laws and amendments with a sincere intent to enhance tax collection but we fear that most of these laws and amendments which have enhanced discretionary powers to FBR officials even at lower level would only be used to harass the taxpayers in order to seek personal benefits and gratifications.

    “The government is serious towards improving the tax collection which we highly appreciate but the recently introduced laws and amendments need some review and scrutiny by independent individuals. These laws should be devised and implemented in such a manner that they don’t pave way for corruption but actually enhance the revenue”, he added.

    He was of the opinion that in order to achieve the desired results in terms of revenue collection, the government has simultaneously opened many fronts which have terribly disturbed the entire business cycle and it was the basic reason behind why they (the government) have been facing agitations and resistance.

    “It is requested to compare all the segments where taxes have been imposed verses the revenue expected and decide whether it is worth to take on that particular segment immediately or leave it for a while. We are not asking to leave anybody out of the net but wherever the implementation is not immediately possible it’s better to give some time and let the country move forward, he added.

  • No compromise on documentation; PM refuses to withdraw CNIC condition

    No compromise on documentation; PM refuses to withdraw CNIC condition

    KARACHI: Prime Minister Imran Khan on Wednesday showed firm resolve to document the economy and flatly refused demands of business community to withdraw condition of CNIC on sales above Rs50,000.

    Representatives of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chamber of Commerce and Industry (KCCI) met the prime minister at the Governor House. The entire prime minister’s team of finance and commerce was also present at the meeting.

    The business community urged the prime minister to withdraw the condition of CNIC at the time of sales, which was introduced through Finance Act, 2019.

    Sources said that the Prime Minister had refused the demand and told the business community that the businesses had to be documented. The prime minister said requirement of CNIC / information on above Rs50,000 sales was quite justified.

    The prime minister said that he wanted to see Pakistan grow on Turkish model. He further said that the government wanted to take along the business community on journey to growth.

    Prime Minister Imran Khan told the business community that he had arrived Karachi to resolve problems of trade and industry. He said that the government wanted to ease in doing business.

    Our priority to eradicate poverty and accelerate economic growth, he added.

    After the meeting business community has expressed disappointment.

    Mirza Ikhtiar Baig, senior FPCCI leader, while talking to media said that the apex body had presented all the problems at the meeting that are hampering the economic growth.

    The prime minister has been informed about protests by small associations. He said that the FPCCI had urged the prime minister to restore zero rated for export sector.

    He said that the interest rate by State Bank was on the rise and it would make difficult for industry to continue the production activities. On the other hand the FBR had also not withdrawn several levies on the export sector.

    The prime minister has been informed that reforms should bring in phases.

    Another meeting was held with export sector in which the prime minister listened to their problems. However, the export sector was also not happy to resolve their issues at the meeting.

  • Karachi Chamber demands restoration of sales tax zero rating for export industries

    Karachi Chamber demands restoration of sales tax zero rating for export industries

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday urged the government to restore sales tax zero-rating for export oriented industries as due to withdrawal of this scheme many industries have shut down their activities.

    KCCI President Junaid Esmail Makda in a statement expressed deep concerns over the worsening crises being faced by the industries across Pakistan after the withdrawal of zero-rated regime which has created a disastrous situation for the export-oriented industries and it was a matter of grave concerns that many industries, particularly the textile units and its allied industries have shut down their activities, rendering thousands of people completely jobless.

    He said that the industries have been compelled to pay to 17 to 20 percent sales tax after the withdrawal of zero rated regime, which has intensified the hardships for industrial units of all sizes as they face huge liquidity crisis and more importantly industry cannot borrow the loan from commercial banks at 14-15 percent interest rate which was not a feasible option.

    “If the situation is not timely addressed, we fear that the export-oriented industries will not be able to operate smoothly and they will die”, he added.

    Junaid Makda stressed that keeping in view the miseries being faced by the Industry, the government must reverse its decision to restore zero-rated regime for five export oriented industries while ample opportunity must also be provided to all the stakeholders to amicably settle this serious issue otherwise Pakistan exports, which comprise mostly of textile products, will go all the way down to zero.

    The poor performance of export-oriented industries was something which neither the government nor the business community could afford particularly at a time when Pakistan was struggling really hard to somehow maintain and improve its depleting foreign reserves.

  • Karachi Chamber urges FBR to adjust refunds of previous amnesty’s refunds

    Karachi Chamber urges FBR to adjust refunds of previous amnesty’s refunds

    KARACHI: President Karachi Chamber of Commerce and Industry (KCCI) Junaid Esmail Makda, while referring to his conversation with Minster of State for Revenue Hammad Azhar and Member IR – FBR Dr. Hamid Ateeq Sarwar during meetings in Islamabad, stated that after listening to the grievances being faced by those individuals whose asset declaration cases were stuck up due to some IT glitches on last day of Amnesty Scheme 2018, the State Minister and Member IR suggested that five percent tax paid against the assets declared by such individuals can be refunded so that they could re-declare their assets in this year’s Asset Declaration Scheme.

    In a statement issued on Tuesday, President KCCI pointed out that KCCI received numerous complaints about unprocessed cases of last year’s amnesty scheme in which although the individuals submitted their taxes well in time within the last date of the amnesty scheme but their cases were not processed in FBR’s portal and to date, the fate of all such cases has not be decided.

    “KCCI has written numerous letters from time to time so that the issue could be resolved and the policymakers have been assuring to look into this issue but no relief has been provided so far”, he added.

    He said that as the government was making all out efforts to make this year’s Asset Declaration Scheme successful, they must look into the possibility of providing relief to such individuals whose cases were not processed in last year’s Amnesty Scheme due to congestion in FBR’s portal or any other IT-related glitch.

    Junaid Makda suggested that FBR should come up with a relevant notification in this regard in which they must announce refunds to such cases so that these individuals could quickly avail this year’s amnesty scheme.

    He was fairly optimistic that keeping in view the government’s seriousness towards the Ease of Doing Business, the FBR would look into this matter and accordingly announce relief for such individuals as per commitment which would encourage many others to come forward to participate in this year’s Asset Declaration Scheme.

    He was of the opinion that although the last date for Asset Declaration Scheme has been extended for three more days but it was not suffice and the government must extend it for at least 30 more days so that maximum number of people could avail this scheme which would prove beneficial for the national exchequer. “The business community remained heavily engaged in identifying budget anomalies, leaving a very little time to examine and look into the possibility of benefitting from Asset Declaration Scheme whose deadline has to be extended”, he added.

  • Karachi Chamber opposes CNIC condition on supplies

    Karachi Chamber opposes CNIC condition on supplies

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has opposed the requirement of Computerized National Identity Card (CNIC) details to be provided by suppliers of unregistered buyers.

    In a statement issued on Wednesday, the KCCI said that through an amendment to Section 8 (Sub-Sec.1, Clause M) of Sales Tax Act 1990, it is now mandatory for the supplier of goods to provide CNIC number of unregistered buyer of raw materials and finished products, effectively placing the responsibility to identify non-filers on the shoulders of compliant taxpayers.

    It was pointed out that with a dismally narrow tax base of Sales Tax registered persons comprising hardly 35000 in number, it is virtually impossible for the importers, manufacturers and suppliers of goods to find registered buyers or those willing to provide their CNIC details.

    Consequently the inventories of unsold goods with traders, stockists, importers and manufacturers are piling up, blocking their entire working capital as well as the funds borrowed from banks.

    The overnight change has put entire trade and industry in a quandary as to whether or not to continue in business because it is simply not possible to find registered buyers or those willing to provide their CNIC.

    KCCI and other trade bodies are overwhelmed with complaints from traders, importers, manufacturers and dealers to take up this serious issue with Finance Ministry and FBR to find a workable solution immediately to pre-empt a crisis within the trade and industry, he added.

    President KCCI Junaid Makda, therefore, urged the Advisor to Prime Minister on Finance, Revenue & Economic Affairs Dr. Hafeez Shaikh and Chairman Federal Board of Revenue (FBR) Shabbar Zaidi, to review the provision of CNIC, taking into account the ground realities of Pakistan’s economy and withdraw the condition to provide CNIC details of unregistered buyers in Sales Tax Invoices as it is not possible to comply with the condition with immediate effect.

    He further urged the authorities to defer the proposed measure for at least one year so as to facilitate a gradual transition from current procedure and to help release the working capital of entire supply chain which is currently blocked.

    Already the economic activities are very slow and such measures will further aggravate the situation.

    Since the Chairman FBR has formed the anomaly committee which includes representatives of business community, the matter will also be raised with the meetings of committee along with other major anomalies which exist in the Budget 2019-20, he assured.

  • KCCI seeks three month deferment for implementing unregistered buyers’ details

    KCCI seeks three month deferment for implementing unregistered buyers’ details

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Monday urged the government to defer implementation of obtaining information of unregistered buyers.

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  • Karachi Chamber highlights budget anomalies, urges rectification

    Karachi Chamber highlights budget anomalies, urges rectification

    KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Junaid Esmail Makda, while highlighting various Sales Tax and Income Tax anomalies unveiled in the Federal Budget 2019-2020, appealed Prime Minister Imran Khan, State Minister for Revenue Hammad Azhar and Chairman FBR Shabbar Zaidi to rectify all these anomalies on top priority prior to seeking approval of the Budget from the parliament.

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  • Any duty increase on beverages to result in industry closure: Siraj Teli

    Any duty increase on beverages to result in industry closure: Siraj Teli

    KARACHI: Siraj Kassem Teli, director of Pakistan Beverage Limited (Pepso Co. franchisee), while using platform of Karachi Chamber of Commerce and Industry (KCCI) raised voice against government’s proposed plan for implementing excise duty on beverage industry.

    Teli, who is also chairman of Businessmen Group (BMG) and former President of KCCI, warned the government against hike in duty on beverage industry and said that any such action would lead not only to closure of the industry but also resulted in mass unemployment.

    In a letter sent to Prime Minister Imran Khan, while referring to the ongoing buzz in the media and government circles about additional and new taxes including health tax and water surcharge being imposed in the next budget on beverage industry, he stated that this industry is already paying Rs100 billion to the national exchequer by way of output tax through FED and Sales Tax while the net revenue collection by the government comes to around Rs60 billion per annum which is apart from income tax, with-holding taxes, super tax and other provincial taxes.

    He pointed out that over the years, beverage industry and its products have become a necessity of life as many Pakistanis do not have access to pure drinking water and this industry is providing them safe water and other beverages produced with state of the art machinery by strictly following global hygienic standards.

    “We understand that the country is in dire need of additional revenue but one should realize that this new revenue must come from new sources and even if it is taken from old sources then it needs to be justified according to their capacity to pay otherwise it may jeopardize the existing revenue”, Siraj Teli stressed, adding that the Beverage Industry is already heavily taxed and if more burden is put on the industry, its growth, which is already in a declining mode in the first quarter, may suffer more.

    He said that the cost of doing business has already gone up due to other import/ regulatory duties and upsurge in dollar rate etc. while as this industry produces consumer products, more burden will be passed on to the consumers.

    Chairman BMG cautioned that there is a high chance that the imposition of new taxes may lead to closure of the industry resulting in jobs losses of hundreds of thousands of people across Pakistan, besides hampering Prime Minister’s efforts to bring more foreign investment to Pakistan because of such anti-business measures.

    He elaborated that this is an industry where supply side of economics should follow where more revenue is generated with growth, wherein taxes are reduced along with consumer prices that would lead to quantum growth and appreciation in net revenue as well. Any proposal to increase taxes will reverse the growth and it would start declining, ultimately reducing the revenue already being achieved from the Beverage Industry and above all high taxes are incentive for evasion, he added.

    Siraj Teli was of the opinion that today’s policy is actually shrinking the economy whereas the Government should have imposed a complete ban for one or two years on luxury items such as cars etc. and on those items which are being manufactured in Pakistan along with such food items without which we can survive.

    “Also controlling inflation by increasing interest rates has a negative impact on new investment and industry. The solution lies in more industrialization only”, he added.

    He said, “We at Pakistan Beverage Ltd. are in this business since the inception of Pakistan and are the highest tax payer in the Beverage and Food Industry for the last 40 years.

    “We believe in a prosperous Pakistan, we believe in paying due taxes and we are there to help and support your initiatives.

    “However, unjustified and excessive taxation will result in closure of the industry and put a significant dent in the existing revenue that is being collected by the government.

    “This will also result in reduction of employment of hundreds of thousands of job across Pakistan in the industry along with the allied retail businesses.”

  • KCCI expresses concerns over frequent rise in POL prices in Naya Pakistan

    KCCI expresses concerns over frequent rise in POL prices in Naya Pakistan

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has expressed concerns over frequent rise in petroleum prices in Naya Pakistan of present government and said that such hike in prices will make life difficult for common men and will substantially increase the cost of doing business.

    President KCCI Junaid Esmail Makda in a statement on Saturday, while expressing sheer dismay over yet another hike in petroleum prices, devaluing rupee and unbearable inflation, rejected the increase in petroleum prices just ahead of upcoming Eid ul Fitr as a gift for the festival which would not only intensify the hardships for the masses but would also create a very difficult situation for the business and industrial community due to high cost of doing business.

    He noted that after the upsurge in POL prices, HSD price has increased to Rs126.82 while petrol has touched the highest mark of Rs112.68, creating a very difficult situation for people from all walks of life in the ongoing era of inflation.

    “Our Prime Minister talks a lot about cost and ease of doing business in Naya Pakistan, but how is it going to be possible when we have to frequently face hikes in prices of petroleum and other utilities, fluctuating exchange rates with higher duties on import and higher interest rates”, President KCCI asked.

    Referring to the recent severe devaluation of Pakistan rupee against dollar, President KCCI said that the rupee was seen devaluating by approximately 23 percent against US Dollar from Rs123.60 to around Rs152.00, making it the worst performer when compared with 13 other currencies of Asia.

    “Severe devaluation of rupee under IMF dictates along with State Bank’s strategy to keep on raising the key interest rate have resulted in raising the cost of doing business and the inflation, intensifying the hardships for the industry and the public therefore, it is really crucial to review the current strategies being pursued by the economic managers as these have proved counterproductive, detrimental for the economy and totally contrary to government’s claims towards the Ease of Doing Business”, he added.

    He stressed that the emerging situation has to be efficiently addressed and handled very carefully otherwise, the rising petroleum prices and exorbitant devaluation will continue to increase the cost of doing business, which would terribly affect the industrial performance, raise unemployment and open the floodgates of inflation, particularly for the middle and lower segments of the society, besides making the poor more poorer due to unbearable inflation.

    Makda further elaborated that the rising dollar would lead to costlier imports and the exporters will also bear the brunt due to rise in cost of imported raw materials, pushing the economy into further deep crisis. Despite so many measures taken to discourage the imports including the imposition of Regulatory Duty on many items, Pakistan’s imports remain inelastic and a weaker rupee will not help. Mostly, they consist of raw materials, intermediate goods or machinery. Any devaluation would increase their cost thus making Pakistani exporters less competitive, he added.

    He suggested that State Bank needs to ascertain the factors weakening the value of rupee and also check the possibilities of undue speculations and panic buying which, if done, would certainly help in stabilizing the rupee and restore the confidence of the business community.

    Referring to SBP’s Monetary Policy Statement in which benchmark interest rate was raised to 12.25 per cent, President KCCI stated, “The State Bank has to realize that tighter monetary policy stance never yielded positive results therefore, it is high time that the central bank must soften its stance in order to ensure relief to the businessmen and industrialists who are playing a major role in Pakistan’s economic progress and prosperity by continuing their businesses in extremely dire circumstances,” he added.

    President KCCI further noted that the Asian Development Bank has forecasted Pakistan’s economic growth at 3.9 percent for FY19 and 3.6 percent in FY20 while the World Bank has predicted growth rate of 3.4 percent in FY19 and a further decrease to 2.7 percent in FY20.

    Moreover, the lowest projected growth for FY19 comes from the IMF at 2.9 percent which the international lender expects to drop to 2.8 percent in FY20.

    All these poor forecasts by these international organizations paint a bad picture for potential investors as they get scared away which was really worrisome, he opined.

    He hoped that the federal government would realize the gravity of the situation and accordingly take steps to stop further devaluation of rupee against dollar while the State Bank’s benchmark interest rate will also be brought down to single digit to spur economic growth and industrialization in the country.

    A favorable reduction in discount rate would bring down the cost of doing business, attract fresh investment and promote expansion & industrialization, besides creating job opportunities and enhancing exports of the country, he added.

  • KCCI praises Imran Khan for providing relief to tax evaders through amnesty scheme

    KCCI praises Imran Khan for providing relief to tax evaders through amnesty scheme

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has praised Prime Minister Imran Khan for giving opportunity to tax evaders to document their black money at very low tax rates.

    KCCI President Junaid Esmail Makda stressed that in order to make the amnesty scheme successful, the government will have to ensure complete secrecy and confidentiality of the declarants’ data at any cost otherwise, they will not be able to achieve the desired results.

    He said that this amnesty scheme must not end up like the last one in which the highly classified data of those individuals who availed the previous amnesty scheme was shared with several government agencies including Federal Investigation Agency (FIA) and National Accountability Bureau (NAB) against the commitment to keep declarants’ info confidential.

    Referring to government’s assurance to keep this scheme easy to understand, he hoped that the amnesty scheme has been devised in such a manner that number of queries are kept minimal as it is a well-known fact that individuals will be reluctant to respond to excessive queries seeking details about the source of income and other such questions because of fears of getting into any kind of trouble in future.

    “The business community will be more than happy to become part of the documented economy but the government has to support them by protecting them from any kind of harassment from agencies/ institutions”, he added.

    He further stated that although the government has provided the opportunity to become part of the scheme until June 30 but this scheme must be extended for a longer period.

    After seeing the failure of previous amnesty scheme in which harassment by serving notices was widely witnessed, many individuals will be reluctant to declare their assets hence, the government must extend it and also has to take confidence building measures in due course to regain the trust of the masses.

    “After seeing some success stories of those individuals who avail this year’s amnesty scheme, I am sure many others will also come forward to benefit from the amnesty scheme so it must be made available for a longer period to tap such individuals”, he added.

    He was fairly optimistic that the scheme will help the government in bringing undocumented persons, assets and income into the documented sector. The scheme has the potential to bring in macroeconomic and fiscal stability in the economy.

    President KCCI further stated that this scheme offers a lucrative opportunity to pay just 4 percent for legalizing Benami Assets within the country and 6 percent for assets outside the country while 3 percent tax for undeclared sales which was a good offer for whitening the black money.

    While complimenting Chairman FBR Shabbar Zaidi for taking pro-business steps, Junaid Makda hoped that he would continue to do so throughout his tenure which would help in restoring the confidence of business community to a great extent and that in turn would lead to economic prosperity for the entire country.

    He advised Chairman FBR to formulate practical policies to increase the tax net and catch tax evaders in order to strengthen the country’s economy.

    The loyal taxpayers are being overburdened every year to achieve the revenue targets whereas those outside the tax net continue to enjoy all the luxuries of life without contributing a single rupee to the national exchequer, he opined, adding that FBR has been claiming of having details of all such tax evaders since many years but unfortunately no action has been taken so far to strictly deal with them.