Opposing the proposals regarding enhancing the general sales tax on different sectors, the Multan Chamber of Commerce and Industry (MCCI) has called upon the government to bring down high general sales tax rate to single digit level in the upcoming federal budget 2015-16 that will help in reducing inflation, boosting business activities and attracting more investment.
Multan Chamber of Commerce and Industry (MCCI) President Man Iqbal Hassan said that 17 percent GST in Pakistan was very high as compared to other countries. He said GST was just 5 percent in Taiwan, 6 percent in Malaysia, 7 percent in Iran & Singapore, 8 percent in Japan, 10 percent in Afghanistan & Indonesia and 12.36 percent in India.
He further said the very high GST in Pakistan has put the business community at great disadvantage with regard to its competitors.
He said high GST for a developing country like Pakistan was not suitable and added that it was a major hurdle in the growth of business activities as it had caused inflation, squeezed the purchasing power of consumers and was a discouraging factor for attracting new investment. He said high GST also affected the margins of manufacturers as they have to share the GST burden and hence leading businesses towards the informal economy.
Iqbal Hassan said the single digit GST will create multiple benefits for the economy as it will create a conducive environment for growth of trade and industry, reduce inflation, enhance purchasing power of people, boost business activities and attract more investment in the country. He said low GST would also eliminate malpractices in refund claims and tax input leading to the reduced cost to the national exchequer. He said the main advantage of reducing GST to single digit would be giving a big relief to the common man especially to the low and middle-income groups.
The MCCI president also stressed the need for making income tax return forms simple and easy to understand for a common taxpayer. He said complicated tax forms were creating problems for most of the taxpayers and the government should focus on simplifying these things and print tax forms in Urdu to facilitate the taxpayer, which will also help in generating more tax revenue for the country. He said the government should make efforts to expand the tax net instead of putting more burden on the existing taxpayers. The government should allocate more funds for health and education sectors and provide tax relief to the IT sector as well, he added.