KARACHI: The government can earn more revenue from income tax on rentals income by adopting a uniform rate of 10 percent income tax rather to put the tax-payers in different tax slabs and complex calculations of income tax on rentals.
This was stated by President, Federation of Pakistan Chambers of Commerce and Industry ( FPCCI) Zakaria Usman in a press statement here on Tuesday.
He maintained that different slabs introduced during budget 2013-14 should be abolished because these slabs will open a window for mis-declaration, corruption and tax evasion. The landlords keep fake receipts to evade the actual rental income to avoid payment of income tax as per actual slab.
He said that tax cannot be collected by force. The people would like to pay taxes without fear if taxes policies including the rates of taxes are rationalized. The tax-payers should not be indulged into unnecessary record keeping and complex calculations.
The government should adopt soft policies for collection of revenues through different taxes. Due abrupt increase in the tax on rental income from 10 % to 24% approximately the rentals of the warehouses are increased manifold.
The government is well aware about the fact that there is acute shortage of warehouses in Pakistan. The businessmen have to get the warehouses on rent to procure and store their goods/stuff.
Zakaria Usman said that FPCCI in its pre-budget proposals has already urged the FBR to reduce and fix the tax rate on rental income at a uniform rate of 10 % with full and final settlement of tax liability. This will encourage the tax-payers to pay their tax liability honestly and willingly without fear. The mechanism of low tax rates will enable the government to broaden the tax net with new tax payers.
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