‘Industrialization requires reduced cost of doing business’

KARACHI: National Business Group chairman and Pakistan Businessmen and Intellectuals Forum president Mian Zahid Hussain has said national development and tax compliance cannot be ensured unless the tax rate is reduced.

Industrialization and employment generation required reduced cost of doing business which will also lure new investments for which the resumption of zero-rating facility is also required, he said.

Mian Zahid Hussain said that the tax burden on the industry must be reduced while the liability of tax on sectors paying one to two percent tax should be increased to strike a balance.

He said that people accepted high taxes in developed countries where they got services in return while the taxpayers got nothing in return in the developing countries, and so tax evasion was preferred.

He noted that lack of confidence between the government and masses, corruption and wastage of tax money on fancy megaprojects also discouraged the taxpayers from complying.

Rich countries depended on direct taxes while indirect taxes were at the lowest rate contrary to the poor nations where governments depended on indirect taxes like the 17 percent GST in Pakistan, he observed.

He said that some finance ministers and chiefs of the FBR tried to reduce indirect taxes in the past but ended up increasing taxes due to ever-increasing expenses of the government.

The undue tax burden on the industrial sector was resulting in shifting of the industry to other countries and pushing industrialists to other sectors which enjoyed little rate of taxes, he said.

Mian Zahid Hussain said that Pakistan could not attract investment in the industrial sector unless the taxes were reduced.

Copyright Business Recorder, 2021