KARACHI: Federal Minister for Finance and Revenue Affairs, Shaukat Tareen met with the FPCCI members and ensured that their input will be taken while preparing the budget.
In a meeting with the finance minister, the President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Mian Nasser Hyatt Maggo apprised the new head of the prime minister’s economic team on issues being faced by the businesses, industries, and trade community of Pakistan.
He specifically pointed out a number of reasons including the required paradigm shift in the present taxation structure towards the need of recovering the ailing economy. Shaukat Ahmed Tareen, during the meeting, admitted that much needs to be done and the measures have to be radical and sustainable incremental changes in consultation with the business community.
During the meeting, Tareen referring to the presentation sent by FPCCI on “Reduced Taxes for Accelerated Growth and Enhances Tax Revenue”. said that the presentation has been seen by him and it has merits for due consideration which will be addressed on ground footing, with the continuation of consultancy.
The finance minister further appreciated the tax policy and principle concept given in the presentation while pointing out his differences on the proposed reduction in consumption taxes which is a large contributor to the accumulated taxation.
He further, took the notice of presentation containing proposed tax simplification and reduction proposals. On the various tax rates proposed by FPCCI, he said that these can be further discussed for its outcome but however suggested Sales Tax rate of 5 per cent needs to be enhanced to 7-8 per cent as the present sales tax rate of 17 per cent is already too high for promoting the economic activities and broaden the tax base.
On custom duties, Shaukat Tareen said that the proposed rate of 5 per cent across the board needs to be split for the import of finished goods at 10 per cent for due tariff protection. On a few of the slides presented during the meeting by FPCCI.
Mian Nasser Hyatt Maggo discussed the need of giving due representation to FPCCI nominees on all boards and councils constituted for considering the ease of doing business and improving competitiveness of economic produce to bid more exports and reduce imports.
The present trend of giving individual representations to few big business houses is not supportive for political stability in the absence of representatives of businesses at large wherein Small Medium Enterprises (SMEs) and small and micro businesses have to be accommodated for economic growth. He said that economy’s growth during COVID-19 to be preferred over fiscal consolidation, which is achievable in low tax rates, broadening of tax base, and bringing in compulsory registration of potential taxpayers, otherwise to be filers in the system.
Mian Nasser also drew the attention of the finance minister on the present taxation system in which the tax collection and adjudications is performed by same tax officials in the negation of constitutional requirement by which tax adjudication functions have to be separate and independent with no cross bordering of the same officials in collection, audit, recovery and adjudication.
President FPCCI further invited the attention towards the need of immediate holding in abeyance of CNIC conditions for buyers in order to collect more sales tax up to June; he also asked for allowing sales to unregistered persons as already sales tax collections have come down due to this reason and the situation of likely to collect more sales tax will happen by withdrawing this restriction of sales to unregistered persons up to June 2021.
Shaukat Tareen assured FPCCI that he will advise the Chairman Federal Board of Revenue (FBR) to swiftly start a consultative process with FPCCI on reduced taxes for accelerated growth and enhancement of tax revenue presentation which has been received by him and he has also scanned the same.
He also announced that he will soon be visiting FPCCI’s head office in Karachi. He also offered to FPCCI president to nominate one member each to twelve EAC groups that are making recommendations on economic, financial, business, and sectoral issues
