FPCCI prepares multivolume document on forthcoming budget

"The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has successfully completed the exercise of preparing its proposals on the ensuing Federal Budget 2020-21 keeping in view the objectives of (i) Revamping Taxation System (ii) Documentation of Economy (iii) Employment generation through Industrialization (iv) Promoting a responsive and equitable Taxation System (v) Infrastructure Development (vi) Trickledown effect of the fiscal space to the grassroots level etc., and would be submitted to the concerned quarters within fortnight."

This was stated by Mian Anjum Nisar, President, FPCCI and Zakaria Usman, Convener of the FPCCI Budget Advisory Council.

Elaborating on the methodology of the budget proposals exercise, they stated that the FPCCI, with a consistent commitment to developing and promoting a modern, responsive and equitable taxation system, has formulated these proposals on the basis of impartial, unbiased and transparent manner.

They said that the exercise was a painstakingly lengthy process which involved incorporating feedback received on matters related to revenue and taxation throughout the year from our members located across the country and input obtained from our member trade bodies, stakeholders, tax practitioners, knowledgeable people etc., through invitation of proposals, organizing of workshops and holding of a series of Budget Advisory Council meetings wherein these proposals were discussed in detail and some contradictory proposals were re-examined and final proposals were redesigned in line with the best interest of the country.

They said that the FPCCI document consists of three volumes -- Vol-I discusses issues of macroeconomic nature and their solution; Vol-II contains policy issues relevant to Taxation (Sales Tax, FED, Income Tax and Customs); and Vol-III contains Industry Specific Proposals received from FPCCI members.

Moreover, the FPCCI would also submit its proposals to meet the challenges being faced by the trade & industry due to outbreak of COVID-19 as its severe and adverse impacts on various aspects of Pakistan's economy may lead to negative growth rate, deterioration in current and fiscal balance, disruption in supply chain, increased unemployment etc.

Mian Anjum Nisar added, "The macroeconomic proposals contain long term action plan to boost exports; promotion of Branding; Enhancing SMEs sector; Monetary Policy; Creating Employment Opportunities through industrialization; Taxpayers Bill of Rights; Independent Tax Judicial System etc."

Zakaria Usman, Convener of the Budget Advisory Council, said, "In Direct Taxes, it has proposed to the Federal Board of Revenue (FBR) to reduce the tax rates to help increase competitive edge of indigenous products in both local and global markets; broadening of tax base; curtail parallel economy etc., as high tax rates provide incentives for tax evasion and corruption and results in high cost of doing business.

At present the total number of NTN holders in Pakistan is over 4 million. However, the FBR has miserably failed to obtain return of income from such NTN holders and increase the number of active taxpayer during the last decade.

They added that according to a study, 2.1 million Pakistanis (individuals) filed income tax returns in 2006-07 which shows that FBR during the last 14 years could not fetch much tax filers, despite prescribing higher withholding tax rates for non-filers."

He added, "This underscores the need that FBR should conduct a study to find out what has gone wrong that even after penalizing the non-filers, they are happy to pay more by way of advance tax instead of filing returns."

He proposed that it is desirable that measures should be taken to facilitate those who are already taxpayers and contributing to the national tax pool in all manners so that they become goodwill ambassadors for the FBR.

"Resultantly, for the last many years, the registered taxpayers are less than 1 percent of the population of our country, which needs to be enhanced," he concluded.