ICCI calls for curtailing expenditures, increasing tax base

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 ICCI calls for curtailing expenditures, increasing tax base

Islamabad:Association of Chartered Certified Accountants (ACCA) Pakistan in collaboration with Islamabad Chamber of Commerce and Industry (ICCI) organised a pre-budget seminar with an aim to contribute its efforts towards healthy fiscal measures in the country.

Addressing the seminar, Aftab Ahmed, Chief Commissioner, IR-RTO Federal Board of Revenue said that there is a misconception that the reduction in the tax rates would correspondingly improve revenue collection. Practically, this never happens which is event from past experiences that whenever tax rates were brought down, it never resulted in major increase of revenue collection. He said that there is need to improve compliance and expand the tax base for increasing tax collection.

While boldly admitting deficiencies of the tax department and its limitations, he said that the tax policy must be driven by the direct taxes but indirect taxes get more share in overall revenue collection and every citizen is contributing in the indirect taxes in one way or another. He categorically said that the frequent issuance of the SROs is not only damaging the tax machinery but also affecting tax system. There is an issue with the tax laws which can only be amended at the time of budget through Finance Act.

He said that the use of IT and electronic filing of returns can change the concepts of the taxpayers by reducing their direct interaction between taxpayers and tax department. Some tax incentive should be provided to the electronic filers of tax returns in budget.

Speaking on the occasion, Zafar Bakhtawari, President ICCI said that said that tax collection has significantly increased from Rs.400billion in year 2002 to around Rs.1900billion in year 2012 but unfortunately businessmen were always blamed that they were not paying their due taxes.

He said that revenue collection has also increased due to encouragement of self assessment schemes introduced by FBR. He said that our budgetary expenditures were around Rs.3000 billion and huge amount of Rs.1100 billion was drain away for debt servicing which needs to be controlled in upcoming budget for better fiscal management.

Bakhtawari suggested that the next fiscal budget should take emergency measures to deal with the curial issue of load shedding in the country.

The budget should focus on providing alternate energy sources on emergency basis as Pakistan has huge Thar-coal reserves which could be exploited to overcome energy crisis. He cited the example of India and China, who are producing more than 30percent of electricity from coal while Pakistan is not even producing 1percent from this source.

ICCI President further said that the public sector entities including Pakistan Railways, Wapda, PIA, Steel Mill and many other PSEs are incurring a loss of over Rs.600 billion annually. He said that enterprises should be immediately privatized or at least their 20 percent shares should be offered to the private sector to check massive losses.

He said that contribution of manufacturing, agriculture and services sector in the GDP were 26pc, 20pc and 54pc respectively while their contribution in the tax collection is 66pc, 1pc and 33pc respectively. Therefore, he emphasised to increase the contribution of agriculture sector in the tax collection as well as stressed to increase the tax base for significantly increasing the tax revenues.

Courtesy: The Nation

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