Tax amnesty scheme to help expand tax net: Haroon

Prime Minister's Assistant on Revenue Haroon Akhter Khan has said that Tax Amnesty Scheme is a big breakthrough and it would help expand tax net. Collection of revenue always remained under pressure due to various reasons. He was speaking at the Lahore Chamber of Commerce & Industry along with Minister of State for Finance & Economic Affairs Rana Muhammad Afzal Khan. Haroon Akhter said that government has made reasonable progress at economic fronts and took bold decisions in the larger interest of the economy. He said that consultation has made with the stakeholders at vast scale to make upcoming budget friendly. He said that business community has been given relief in rules and regulations wherever it was possible.
He said that people having taxable income should give tax that would reduce burden from the existing taxpayers. He said that government has taken measures to make real estate sector documented. Speaking on the occasion, State Minister of Finance & Economic Affairs Rana Muhammad Afzal Khan said the industrial growth is a must for progress. He said that government has formulated the budget for long term benefit. He said that we are trying to enhance revenue by improving the existing tax recovery system in the country. He said that attitude of tax collection machinery should be friendly with the business community. He said that systematic efforts are being made to fill the gap between tax payers and tax collectors.
Rana Muhammad Afzal Khan has said China Pakistan Economic Corridor (CPEC) is the road to economic development and prosperity, not only for Pakistan and China but also for the whole region. He said CPEC would help promoting agriculture sector of the country, besides promoting the other sectors of economy.
LCCI President Malik Tahir Javed said that current account deficit in the period (July-Feb) FY 2018 is US$ 10.8 billion as compared to US$ 7.2 billion in the same period in FY 2017. The net foreign exchange reserves with the State Bank of Pakistan have declined to US$ 11.78 billion as of 22nd March 2018. These factors coupled with a weak and outdated tax system has also contributed in further pushing down the ease of doing business ranking from 144th to 147th place that indicates the deteriorating economic situation of the economy.
He said that the introduction of broad based tax reforms in Pakistan has become imperative. Existing narrow tax-base, the policy makers instead of revolutionizing the tax policy options, seem defendant on the burdening the existing taxpayers whether corporate, salaried, individuals and certain other documented sectors of the economy.
He stressed the need for harmonization among the provincial and federal tax collecting agencies. There are certain major services including toll / vendor services which are still under the ambit of federal government whereas provincial governments also demand tax on such services. He said that number of taxes and frequency of paying taxes must be reduced.
Malik Tahir Javed said that section 38 and 40-B of Sales Tax Act, 1990 is being adversely used by the officials of tax department. He said that teams from tax department should only visit the markets, if indispensable. In case of the visit of tax officials, the proper legal process should be followed and the business community should not be harassed. He said that the system of sales tax refunds for the electricity and gas bills of zero-rated sectors is not working properly. These sectors should be truly made zero-rated so that no sales tax is applied and there is no question of claiming it back. He said that alternative dispute resolution mechanism (ADRC) should be strengthened by FBR as it is inexpensive, swift, and also eliminates possibility of rent seeking.
The government should take steps to control smuggling at the borders. The frontier core deployed at the borders should be equipped with state of the art technology so that they can exercise their authority more effectively under Customs Act. He suggested that duties on such goods which are prone to smuggling should be reduced as it has been practiced successfully in many other countries. These facts clearly indicate that there are a number of operational issues in our tax system. The cumulative rate of taxes goes as high as 20-25 percent which encourages smuggling. We are of the view that all sectors of the economy must contribute according to the principles of equity & justice. The SRO culture should be ceased.
The industry's share in the composition of national economy is 20 percent whereas it is paying 70 percent of all the taxes. He suggested single tax and one tax authority to avoid the multiplicity of taxes. Tax rate should be brought down to single digit, he added.