The Federal Board of Revenue (FBR) and Institute of Chartered Accountants of Pakistan (ICAP) on Tuesday agreed on broadening the tax base, reducing duties and taxes on manufacturing and industrial sectors, and addressing anomalies in direct and indirect tax laws.
The unanimity in views was found when FBR Chairman Mumtaz Haider Rizvi, delegation including Shahid H. Asad, Member, Inland Revenue, all Chief Commissioners from large taxpayers Unit, and Regional Tax Office, Karachi visited the ICAP in Karachi.
ICAP's President Rashid Rahman Mir welcomed the guests. Both of the Institute's vice-presidents, council members and members of the Committee on Taxation also attended the meeting.
The chairman of the Committee on Taxation, Saqib Masood, gave a presentation on tax proposals submitted by the institute to the FBR and the government for consideration for the federal budget 2012-13. He said that the focus should be on broadening the tax base, instead of increasing the tax rate. Amnesty schemes and fixed tax regime should be abolished, as these have proved to be counter-productive.
Relevant laws, he said, should be amended to enable the FBR to relate CNIC numbers with sales of property and vehicles, air travel, payment of utility bills, school fees and club subscriptions. These CNIC numbers may then be matched with NTN numbers by the department. Appropriate check and balances should be introduced for foreign remittances, so that the funds might not be used to whiten money.
Saqib Masood also called for reducing the corporate tax rate to inculcate corporatisation culture in the country. He also suggested that export of goods and services should be equated. Both sides also agreed on a number of other issues, including the documentation drive undertaken by FBR via SRO 191.
The suggestion for removal of duplication of SROs 821 and 191 for better compliance was well received by the FBR chairman. ICAP members also suggested that undesired immunity granted to certain sectors in SRO 821 may also be withdrawn and the law should be made applicable across the board, without any exception, to provide a level playing field to all sectors of the economy.
The Chairman FBR informed the participants of various measures taken by the tax department to reduce taxpayers' difficulties and to ease tax compliance. He lauded the role of ICAP in enhancing taxpayers' awareness. He appreciated the recommendations made by the institute and assured that they would be given due consideration.-PR
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