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LAHORE: The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has expressed serious concern over the decision of the Federal Board of Revenue to once again give the Inland Revenue (IR)'s Chief Commissioners authority of freezing the bank accounts of the businessmen, appealing the government to review this policy and withdraw this anti-industry step so that a tangible and investment-friendly atmosphere could prevail in the country.

PAAPAM newly-elected Chairman Abdur Razzaq Gauhar, in a press statement issued here on Saturday, asked the government to adopt a policy of national economic development which should be aimed at devising some measures and incentives to promote the growth of industrialisation in the country, as the present step to authorise the tax officials with rights of freezing bank accounts of businessmen is totally harmful and can be misused in the face of economic situation in Pakistan.

He added that such punitive action against the business community would create trust deficit, subsequently reducing domestic investment in the country.

The PAAPAM Chairman called for initiating a consistent and long-term policy of national growth to reduce the trust deficit amongst businesses in the country.

He said that taxes are must to run the affairs of the government but these should be imposed according to the ground realities. There is an urgent need of reforming and simplifying the taxation system with the consultation of real stakeholders, besides addressing the issue of double taxation through integration of provincial and federal government laws and harmonisation of FBR and Punjab Revenue Authority. He suggested that taxes should be charged one time by any provincial or federal government, as provinces levy same kind of tax which the federal government has already imposed, escalating the cost of production and discouraging the registered manufacturers. He demanded the government to improve tax structure so that business and investment could flourish in the country, as the existing tax structure discourages investment. He requested the government to focus on reducing tax rates and expanding tax base by bringing all exempted sectors into the tax net.

He said that coordination between the government and the private sector was vital for economic growth, proposing the government to develop policies that could provide conducive business environment in the country.

Abdur Razzaq Gauhar said the sustainable solution to Pakistan's problems lies in the structural reforms, as we can see very large inefficiencies in tax collection, which needs to be removed. So, the tax compliance must be improved and tax base should be broadened.

He pointed out that the FBR's earlier step to encourage a culture of facilitating taxpayers was the announcement in 2019 to curtail the powers of the FBR officials to attach bank accounts of taxpayers. The PAAPAM is disappointed by the FBR's decision in its letter of Oct 11, 2021 to restore the powers of the Chief Commissioners of Inland Revenue to attach bank accounts under section 140 of the Income Tax Ordinance 2001 and section 48 of the Sales Tax Act, 1990.

The PAAPAM is of the view that this letter should be withdrawn with immediate effect as in the past these powers have been used by field formations to harass and intimidate existing taxpayers.

Meanwhile, Ch Arfan Yousaf, Former Vice President and Regional Chairman of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), expressed concerns over a government decision to revoke a rule that made Federal Board of Revenue (FBR) mandatory to warn defaulters 24 hours before freezing their bank accounts.

"This act will open up a floodgate of corruption as it would provide yet another tool to FBR officials to harass the business community," Ch Arfan Yousaf said in a statement. "We, the business community of Pakistan, reject FBR's decision with a fervent appeal to Prime Minister Imran Khan and Finance Minister Shaukat Tarin to refrain FBR from taking this anti-business as it is going to prove counterproductive to all the efforts being made by the government for ease of doing business," he added.

Copyright Business Recorder, 2021

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