KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) held a post-budget press conference after the federal government presented its budget. FPCCI president Mian Nasser Hyatt Maggo addressed the conference in the federation house in Karachi on Wednesday.
FPCCI president said that the tax model proposed by the FPCCI — which was sent to the prime minister, finance minister and Federal Bureau of Revenue (FBR) — was based on a simple, fair and predictable tax system.
10 per cent income tax on individuals and Association of Persons (AOP); 20 per cent income tax on companies; single-stage five per cent sales tax (for exporters zero per cent tax); low rate customs duty (one chapter, one rate five per cent) on all items (with 15-20 per cent tariff protection for the local industry) and Federal Excise Duty (FED) only on luxury & hazardous products, the proposed tax model suggested.
The leadership of the FPCCI claimed that the premier had instructed the FBR to examine the proposal and respond to the FPCCI in terms of agreed, non-agreed and partially-agreed proposals, however, the bureau never responded.
FPCCI president highlighted the gravity of the issues arising due to the introduction of Section 203A in the presence of already available provisions in this regard by the means of Section 192A and other appropriate associated sections with regards to the inevitable need to arrest the taxpayer on account of civil liability. He asked for deletion of this provision on an immediate basis to put the agitating businessmen at rest.
On the issue of inclusion of retailers in the definition of smuggling, he said that better and effective enforcement to disable the supply of smuggled goods to retailers is required; instead of leaving the retailers at the mercy of inspection agencies or FBR.
The FPCCI also demanded the withdrawal of proposed Section 127 of Income Tax Ordinance 2001; which has made filing of appeal contingent upon depositing 100 per cent disputed tax amount – which is against the right to a fair trial in terms of Section 10A of the Constitution of the Islamic Republic of Pakistan that guarantees a person to be entitled to a fair trial and due process.
He also proposed to omit Section 140 in the field of income ordinance by which FBR will be entitled to withdraw initial stage disputed amount from taxpayer’s bank accounts; which does not provide the determined civil rights and obligations for a fair trial and due process.
Mian Nasser Hyatt Maggo informed that the new introduction of penalties and confiscation of goods due to not accompanying invoice list in the container does not match with the ongoing claims of excluding human interaction in the clearance of goods and payment of taxes. He further said that the present trade includes different destinations of negotiations and transshipments and origins of goods; in which the process and procedure of exporting destination may not accommodate such provision of putting invoice in the containers; hence, this proposal in the budget should be withdrawn.
FPCCI reiterated the demand for abolishing withholding taxes and extended its support for collecting income tax on the income as presently major taxes are collected by withholding taxes instead of making the FBR functional in tax collection.