KARACHI: The Karachi Chamber of Commerce & Industry (KCCI) has suggested to the government to tax untapped and undocumented sectors of economy that were not paying their due share to the national exchequer and evading taxes.
‘It is evident that inspite of having one of the highest tax rates in the world, Pakistan is ranked among countries having lowest Tax to GDP ratio,’ the KCCI said in its budget proposals for the next fiscal year 20011-12 here on Wednesday.
‘One reason being lack of resources and weaknesses in documentation while the other is very low or negligible contribution of taxes by the ‘Services’ and ‘Agriculture’ sectors, which is roughly less than even one third of the ‘Manufacturing’ sector, it added.
The disparity in tax collection not only creates attraction to evade taxes but is also a disincentive for Investment, it maintained.
‘Unrest in the economy has been caused by power failures, tax policies, Afghan Transit Trade Agreement, elimination of zero rating and automated Customs clearance system, Audit policies which played a major role,’ the KCCI budget proposal observed.
KCCI, in its proposal further sought quick structural reforms in Collection of Taxes, administration & good governance in taxation departments as well as companies, documentation of economy, elimination of corruption and providing relief to the people at grass root level.
The KCCI President Saeed Shafiq in his remarks on budget proposals said that in order to widen the tax base, it was necessary to take effective measures against under-declaration and tax evasion.
‘Federal Board of Revenue (FBR) will have to tap new sources and enforce strict tax compliance, plug loopholes in taxation regime, broadening the tax-net for achieving the target,’ he added.
He said the only sustainable way to protect low income groups from inflation is by targeted subsidies and the creation of ample employment opportunities.
Comments
Comments are closed for this article.