KARACHI: Suleman Chawla, Acting President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has apprised that the entire business, industry and trade community of Pakistan is of the view that the Section 7E introduced in Income Tax Ordinance (ITO) 2001 through Finance Bill 2022 has categorically proven to be not only chaotic for the economic activities but also futile and ineffective as it has only generated Rs9 billion in the first 10 months of its implementation.
He proposed that the federal budget 2023–24 is an opportune time to listen to the longstanding concerns of the business community, calling upon Ishaq Dar, federal minister for finance & revenue, to capitalize on this opportunity to earn the goodwill of business community. Abolishment of Section 7E in ITO 2001 would prove to be a tangible confidence building measure for the stakeholders of country’s economy and will impart a sense of being heard by their government, he added.
Suleman Chawla questioned the rationale and efficacy of issuing thousands of income tax notices to the filers, who were subjected to harassment and experienced psychological pressures due to those unfair, arm-twisting, ill-prepared and copy-paste notices. Income tax filers and law-abiding citizens need to be facilitated, rewarded and acknowledged – like elsewhere in the world – rather than further squeezed to meet revenue collection targets.
Acting FPCCI Chief maintained that FBR’s Income Tax Department seems to be uninformed of the ground realities as introduction of new provision in the Income Tax Ordinance 2001 in the form of Section 7E means squeezing the existing taxpayers even further, instead of exploring new avenues and broadening the tax base.
He strongly demanded that all existing show-cause notices under Section &E should be withdrawn with immediate effect; wherein a recovery vis-à-vis deemed income of an amount equal to 5% of the fair market value has been demanded for the capital assets and immovable properties held by the concerned persons.
Zakaria Usman, Convener of FPCCI’s Budget Advisory Council, explained that 7E is a levy of income tax on immovable properties – which under the constitution is a provincial subject and is also tantamount to double taxation. Real estate and construction sector would suffer directly due to 7E and it will result in unemployment and decline in commercial & economic activities as more than 70 allied sectors & industries of the construction industry will suffer.
Copyright Business Recorder, 2023
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